STV, the Scottish commercial broadcaster for the ITV network, today poured cold water over proposals for ITV plc, Channel 4 and Five to merge.

Rob Woodward, chief executive of STV, said: "From a purely Scottish perspective, I'm not sure such a merger is warranted or required. I'm not sure how it would deliver the plurality of programmes that the regulator has underscored it wants. We don't believe the current ITV structure is fatally flawed."

ITV plc has floated the idea of a radical three-way merger because it is struggling with a deep advertising recession.

STV underlined the scale of the downturn as it forecast today its national advertising revenues, which are tied directly to ITV1, will fall 21% in the first quarter of 2009. Analysts had been expecting such a drop which is line with other media firms.

But Woodward said local ad revenue, which make up almost a quarter of STV's advertising, has been holding up better.

While national revenue fell around 8% during 2008 at STV, local revenues rose 11% after a drive to woo Scottish advertisers with targeted sponsorship deals. He cited a partnership with the Scottish Blood Transfusion Service whereby the "S" in the STV logo was replaced with a blood-red logo during sponsorship of the European football championships last summer.

The STV boss said he will produce and broadcast more local-produced content to reduce further its reliance on ITV1: “We are looking at opting out of the ITV network schedule and embedding more homegrown Scottish content.”

STV, which has just made the 100th episode of detective series Taggart, has doubled the number of hours of programmes it has produced since 2006.

The broadcaster is now turning to international partners to co-produce more new shows, which can also generate profits through overseas sales. STV has sold its series Adrenaline Junkie, starring Jack Osbourne, to 145 countries worldwide.

Woodward added that STV was in a healthy position after reducing debt by £11 million, handing back £30 million to shareholders and selling Virgin Radio for £53 million last summer.

"There is no doubt that the marketplace is challenging but STV is a restructured, financially sound business with positive momentum," said Woodward.

STV also met 10 of its 12 internal growth targets — known as key performance indicators — which were set 18 months ago despite the downturn.

Full-year results, announced today, showed STV group operating profits fell 13% to £14.2 million in 2008.