BBC boss backs TV channel tie-ups

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In an article, Mark Thompson called on policymakers to look at "consolidation, regulation and competition" to help the channels maintain elements of public service broadcasting.

Channel 4 is facing a funding shortfall of £150 million over the coming years as it struggles with lower advertising revenues, and has been appealing for new forms of funding to meet the demands of digital switchover.

Bosses have already begun cutting the channel's programme budget and making the first of around 150 staff redundant.

Mr Thompson, a former boss of Channel 4, said: "Consolidation could could offer the prospect of both short and long-term benefits: immediate cost savings and an increase in scale in key markets from advertising sales to programme acquisitions, but also the chance for a smaller number of larger players to focus on credible and affordable digital plans."

The prospects of a merger of Channel 4 and Five were first aired in 2004 and resurfaced last month as a possible scenario for plugging Channel 4's funding gap.

Five, which is home to Neighbours, House and CSI, broke even during the first half of this year

Mr Thompson said: "The industry must now take the critical steps towards the major restructuring without which it cannot thrive in the UK or compete internationally.

"Let us avoid the temptation to create yet more new entities and new structures. What UK broadcasting needs is the same as the rest of the economy: simplification, consolidation and the right kind of public-private collaboration."

Broadcasting watchdog Ofcom is currently carrying out a review into the future funding of public service provision on ITV, Channel 4 and Five.