BROADCASTER ITV today ruled out an immediate rights issue, put its digital broadcasting system up for sale and said executive chairman Michael Grade would take a back-seat role before the end of this year.

For weeks there had been speculation that ITV would touch shareholders for hundreds of millions of pounds of cash to tide it over the worst advertising market in 30 years.

Today it denied that Grade was moving aside because investors had rejected his pleas for extra cash and instead said it was because he had achieved most of the regulatory targets he set after he was poached from the BBC two years ago.

The sale of digital broadcaster SDN could raise up to £200 million and ITV has also negotiated an extra £58 million of covenant-free financing although it declined to say whether this came from existing or new bankers.

Grade, 66, had always said his unprecedented role as executive chairman would be short-term but he stands down a year earlier than expected. His successor as chief executive is likely to be chosen from a trio of chief operating officer John Cresswell, commercial director Rupert Howell and director of television Peter Fincham although ITV said it would also look outside the company.

Sources said that despite today's announcement ITV has not entirely ruled out launching a rights issue in the future. But many in the City believe that it will attract a takeover bid long before that happens.