GMTV, ITV’s breakfast broadcaster, admitted last night that viewers who spent £35 million over four years had no chance of winning one of its phone-in competitions.

The figure, larger than previously expected, opens up a massive liability for the commercial broadcaster, which has promised to refund everybody affected – although ITV hopes that not everybody will claim.

GMTV released the £35 million figure last night after its managing director, Paul Corley, had resigned. He is the first television chief to quit after the string of phone-in scandals that have hit every main broadcaster.

It reflects that GMTV took 25 million premium-rate phone calls from viewers after shortlists of potential winners had already been selected by the phone provider Opera Telecom. Those calls, costing between 25p and £1.80 a time, and made between January 2003 and March this year, had no chance of winning.

Mr Corley, who has run GMTV for six years, said that he would like to apologise unreservedly, adding: “It is important that people take responsibility when mistakes are made that threaten the trust of our viewers.” GMTV would not say whether he would get a payoff.

ITV owns 75 per cent of GMTV, with the rest held by the Walt Disney Company. Last year ITV made £288 million before tax; meaning that if everybody claimed the refund it could cost the broadcaster 12 per cent of profits. Every morning about five million people watch GMTV, which vies with the BBC Breakfastto produce Britain’s most popular breakfast show.

Despite yesterday’s admission, there could be more damaging admissions to come for ITV. Michael Grade, ITV’s executive chairman, ordered a separate investigation into its phone-in competitions in recent years. That inquiry, conducted by Deloitte & Touche, is expected to reveal more examples of phone-in competitions in which some viewers who rang in had no chance of winning.

GMTV’s problems were first exposed in April, when an investigation by the BBC’s Panorama revealed that shortlists of potential winners of competitions were selected at about 8am – an hour before phone lines actually closed. At that time GMTV downplayed estimates that calls amounting to £10 million were not being included, although that estimate has turned out to be relatively accurate.

Yesterday GMTV revealed the results of its own internal inquiry into the affair. In addition to the refunds, it also said it would hold 250 prize draws for affected entrants, each with a £10,000 prize, at a cost of £2.5 million. Its sacked phone provider, Opera Telecom, is to contribute £1.5 million to the compensation fund.

GMTV said one of the reasons that the volume of affected calls was so high was that it had adopted stringent criteria for refunds, and included people who called in at moments after the last successful shortlisted caller. It is possible that some people who called minutes after could still have won a prize. It is understood that GMTV derives about half of its £20 million annual profit from the phone-ins, which is an indicator of how lucrative the competitions had become.

Winners and losers

January 2003 Opera Telecom, on behalf of GMTV, begins picking shortlist of potential winners before phone lines close at midnight
June 2005 Closing moved to 9am but shortlists picked at 8am
March 5, 2007 ITV suspends its phone-ins, pending a review by Deloitte & Touche, but independently-run GMTV does not
April 23 Panorama reveals scandal; GMTV suspends competitions. It is estimated that viewers were cheated out of £10 million a year; this is not accepted by GMTV
July 25 GMTV admits that 25 million calls should have been entered. Paul Corley, the managing director, resigns

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