£150,000 rise for ITV newsman ousted by Sir Trevor for the News At Ten

In a deal negotiated by the sister of the channel's executive chairman, Michael Grade, bosses gave the presenter – the current face of ITV News – a £150,000 rise as part of a package worth £1million over three years.

Mr Austin, 48, will work alongside Sir Trevor and Sky News host Julie Etchingham, 37, who ran into trouble when viewers heard her joking off-mic that the new Conservative policy on immigration was 'extermination'.

ITV announced last week that it will move its nightly 10.30pm bulletin back to its original slot as News At Ten, in direct competition with the BBC's Ten O'Clock News for the first time.

News At Ten was dropped in 1999 because executives wanted to screen movies without having to break for the news. Brought back by popular demand in 2001, it was axed again in 2004.

Sir Trevor, 68, continued to present ITV's nightly news programme until he retired in 2005, but Michael Grade is believed to want the presenter to help re-establish News At Ten in its battle with the BBC.

Mr Austin won a Royal Television Society award for his early work as a sports reporter, but is best known as a foreign correspondent, anchoring ITV's coverage of the early stages of the Iraq War, the war in Kosovo and Hurricane Katrina in New Orleans. He won an International Emmy in 2000 for his reporting of the devastating floods in Mozambique.

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He is represented by top showbusiness agent Anita Land, younger sister of ITV chief Michael Grade, although both ITV and Ms Land insist the family connection had nothing to do with the deal. And insiders at the channel said Ms Land had dealt with Mark Sharman, ITV's head of news and sport.

Ms Land said: 'Michael and I decided many years ago never to talk about controversial matters. He used to be chairman of the BBC and it didn't affect my negotiations with them either.'

ITV's news bulletins are provided by ITN, a separate company owned jointly by ITV, Reuters, United Business Media and the Daily Mail and General Trust, owners of The Mail on Sunday.

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The channel refused to comment officially, but an ITV source said: 'It's ridiculous to suggest that Michael Grade would do the nitty-gritty negotiating over a contract, especially one with ITN. The deal was done with Mark Sharman.' Meanwhile, BBC Ten O'Clock News editor Craig Oliver has promised a 'Battle of the Tens' after the announcement that BBC and ITV will go head-to-head to compete for viewers.

Mr Oliver, a former ITN editor, wrote on the BBC website: 'It's strange to think I will be in direct competition with a programme I once worked for. That competition will be fierce – ITV News will throw everything at trying to make sure they are top dog in the slot.'