Bridgeman tries to rescue ITV deal

Granada has hired John Bridgeman, the former Office of Fair Trading director-general, to advise it ahead of a referral of its £2.1bn merger with Carlton Communications to the Competition Commission.

The merger would create a single company controlling almost all of ITV. A recommendation for a full investigation into the deal was made a few days ago to Patricia Hewitt, Secretary of State for Trade and Industry, by Mr Bridgeman's successor at the OFT, John Vickers. Ms Hewitt is expected to agree with Mr Vickers that the merger raises serious competition issues and should be investigated.

Carlton and Granada are set for an intensive round of lobbying to try to avoid the deal being blocked. They will argue that the UK needs to create a national champion in commercial TV and that the growth of BSkyB, Channel 4 and Channel 5 and the success of the BBC's Freeview have made ITV a less dominant force. But advertisers have raised concerns about too much advertising media being owned by one company.

Britain's largest shareholder group is also urging its members to abstain from re-electing Granada's chairman Charles Allen. The National Association of Pension Funds is unhappy with Mr Allen's two-year rolling contract and will urge shareholders to take action at Granada's annual general meeting on 19 March.

The news will be embarrassing for Mr Allen as he hopes to become chief executive after any merger between Granada and Carlton.

A spokesman for Granada said: "We respect the NAPF view. But contracts are in place to reflect the commercial realities of the marketplace."