Time up for ITV Digital as Carlton and Granda end funding

ITV Digital was put into "liquidation in all but name" yesterday after its owners Carlton and Granada refused to provide the pay-TV service with any further funding.

The move leaves the station with only days to find a buyer. The administrator, Nick Dargan of Deloitte & Touche, asked the suppliers of content to provide their channels free and pointed to ITV Digital's assets now being broken up. "Offers are invited for the business and assets. The aim of this process is to attempt to maximise the value of the assets on behalf of all of the company's creditors," Deloitte said in a statement.

The Independent Television Commission, the commercial TV regulator, said: "At the point at which pay services cease to be broadcast and the business no longer fulfils the terms of its licences, we will put in train arrangements to revoke the licences and proceed to an accelerated re-tender."

A new tender for the licence will take six weeks, under a special process offered by the ITC. The regulator must approve all licence holders. The administrator and the ITC had hoped Carlton and Granada would fund ITV Digital through those six weeks, to provide for an "orderly" sales process. The fact this money was not available meant the process had to be moved to the next stage. No evidence of interest from potential buyers ever emerged.

Insiders pointed to the mismatch that now exists between the ITC's timetable and the few days the administrator had open to him, leaving little possibility of a deal.

"Six weeks at the moment is an eternity when the business is dying on its feet," said one TV industry source.

"If anyone bought the assets from the administrator now, they would have to wait six weeks to see if they were approved by the ITC for the licence. This is a liquidation in all but name."

Last night, both the BBC and the Government expressed alarm at the prospect that digital terrestrial television in this country could disappear, along with ITV Digital. The platform is a major distribution channel for the BBC's digital channels.

Tessa Jowell, the Secretary of State for Culture, Media and Sport will make a statement to the House of Commons this morning.

The BBC said: "We are, as a matter of urgency, negotiating with the administrator, to ensure full access to all the BBC's free-to-view channels continues."

It is understood negotiations between Carlton and Granada and the administrator broke down over a £7m cash injection when the ITV companies' money was not given preferential status, the first to be recouped in a wind-up. Also they wanted all creditors, which include Carlton and Granada, to be shown the terms of a rescue deal before it is signed.