Duncan rules out Four deal with Channel Five

Channel 4 has rejected the idea of a merger with Five as it seeks to plug its funding gap, saying the move makes "no sense whatsoever" and compared it to "penguins crowding together for safety on a rapidly melting ice floe".

Andy Duncan, the chief executive of Channel 4, slammed proposals for further consolidation of television broadcasters, saying: "As a solution [it] does not even get to the starting line."

Mr Duncan was speaking following comments from Mark Thompson, the director general of the BBC, who called for a merger of the two rival broadcasters earlier this week. Mr Thompson is not in favour of an alternative proposal, which would see Channel 4 get part of the BBC's commercial unit BBC Worldwide.

Channel 4 needs as much as £150m invested by 2012, and has been considering a range of options for its future funding. However it came out firmly against a merger yesterday, which would amount to a part privatisation of the broadcaster.

"It makes no sense whatsoever to imagine that merging a not-for-profit publicly owned broadcast business with a for-profit, privately owned broadcaster is going to solve the fundamental structural problems we are all facing. Mixing oil and water doesn't work. It just makes a mess," Mr Duncan said.

He added that there was "no question of Channel 4 going bust," but said the downturn in advertising meant its ability to invest in quality British content "is severely pressurised". Mr Duncan told a conference run by the National Endowment for Science, Technology and the Arts, that 2009 "promises to be an interesting year".

He said: "The recession is deepening and prompting some radical re-thinking of the balance between public benefit and private gain in the way we manage our affairs".

He praised the British media industry, saying it had done well in managing and regulating broadcast media through "the best of market forces combined with enlightened public intervention. "Excellent as it has been, that system is now on the point of collapse," he added.

This comes as the government considers ways to shape the digital future of Britain. Lord Stephen Carter is preparing to release his interim report, titled Digital Britain, later this month. "This surely is the time to think about how we might re-boot a system that has served Britain so well," Mr Duncan said.

He called for the plan to include universal access to broadband, a sentiment echoed by Lord Carter in a speech in Westminster on Wednesday.

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