Michael Grade, the chairman of ITV, said yesterday that it was prepared to abandon its obligations to show regional news and children’s programmes.

ITV also wants the right to transmit more adverts per hour and to introduce product placement and Mr Grade said that if the rules were not eased by regulators he would do so unilaterally. “I want to retain our status as a public service broadcaster, but not at any price,” Mr Grade said. “I’m not sure that the regulator understands the urgency of the need for reform.”

ITV raised the prospect of surrendering its analogue broadcasting licences when Britain switches to digital, which would allow it to fill its soap opera, entertainment and drama-dominated schedule as it pleases.

ITV estimates that it costs nearly £300 million a year to comply with regulations, but Ofcom estimates that after digital switchover it will receive only £45 million of benefits from its public service licences. The biggest cost is the £100 million to show 5½ hours of regional news a week, of which 2½ hours is in peak-time.

It is also obliged to transmit an hour of national news a day, restrict the number of minutes per hour of advertising to seven at peak times and broadcast a suitable quantity and range of high-quality and original children’s programmes. Product placement, a revenue alternative to dwindling advertising, is banned.

Mr Grade wants ITV to focus on British programmes, such as Britain’s Got Talent, Coronation Street and Lewis, and has already slashed spending on children’s programmes.

A spokesman for the trade union Bectu said: “ITV has been engaged in cuts for years to appease its backers. The company’s good fortunes lie in regaining its reputation for making quality, popular programming based on an investment in the creative force of its staff.”

The problem is compounded by ITV’s poor trading. Yesterday it reported a £1.53 billion loss in the first half of the year and admitted that the credit crunch was hurting advertising.

Critics argued that Mr Grade’s pleas were designed to distract attention from the financial performance. David Elstein, the former chief executive of Five, said: “These demands on the regulator amount to obfuscation on Michael Grade’s part to take away from a poor set of figures.”

ITV’s regional licence system dates back to its foundation in the 1950s. ITV plc, the company that Michael Grade runs, owns 11 of the 15 regional licences and controls the national breakfast franchise GMTV.

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