Deadline for ITV Digital

Carlton Communications and Granada have set themselves a six-month deadline for sorting out or closing ITV Digital.

The troubled digital TV venture is a running sore for the two media groups. Its losses contributed to a £186m deficit for Granada last week and on Tuesday Carlton is expected to announce losses of more than £400m, largely caused by ITV Digital.

Investors are pressing for Carlton and Granada to lance the boil. Charles Allen, Granada's chief executive, told analysts last week that he would not be in front of them in six months time having to explain further losses at ITV Digital. Gerry Murphy, Carlton's chief executive, is expected to give a similar message this week. The options for the duo are to turn the business around, bring in a partner or close it. It is understood that Carlton and Granada are desperate to avoid the third option.

Carlton is also coming under pressure from shareholders who would like it to sell out to Granada. The law would not allow such a deal, but a Department for Culture, Media & Sport White Paper last week suggested changes to media law that would allow such a deal.

Carlton has also had talks with RTL, the European broadcaster, about a merger, although these have not progressed significantly.

On Friday, Carlton completed a £520m refinancing of its debts which allayed fears in the City that it was in danger of running into trouble with its bankers.