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Sorrell group may pull all its ads from Channel Four in costs row

Channel 4 is facing the prospect that the world's biggest advertising group could, from January, pull all its ads in a major test of strength over the cost of TV airtime.

Group M, the media-buying arm of Sir Martin Sorrell's WPP, wants improved terms for its deal, worth an estimated £200m, but C4, whose hits include The Inbetweeners, is reluctant to acquiesce. It is understood that the two sides are far from being in agreement, with an existing two-year deal due to run out at the end of December.

Those close to C4 acknowledged that Group M could pull its ads if a deal cannot be reached, although both sides stressed there was still time left. Such negotiations often take until the last minute but observers said C4's talks with Group M were unusually tense.

Meanwhile, WPP's shareholders have backed the firm's decision to move its tax base back to the UK from Dublin where it moved four years ago.