Culture secretary Michelle Donelan has recommended that the planned Channel 4 privatisation does not go ahead, a leaked letter has revealed.
Writing to Rishi Sunak, the cabinet minister said there are “better ways to ensure C4’s sustainability” than selling off the publicly-owned broadcaster.
The apparent U-turn follows plans announced by Boris Johnson’s government last year to privatise the channel, sparking outrage from opposition parties, Tory MPs and top media figures.
In a letter leaked to the News Agents podcast, Ms Donelan wrote: “After reviewing the business case, I have concluded that pursing a sale at this point is not the right decision.”
The culture secretary also told Mr Sunak that the TV sector “would be very disrupted by a sale at a time when growth and economic stability are our priortities”.
She said a U-turn on the sale plan “is likely to be popular with parliamentarians, particularly those who raised concerns about the effect a sale of C4C may have on the UK’s system of public service broadcasting”.
Ms Donelan told the PM that the government should use legislation to scrap rules which prevent C4 from producing content for its own main channel, saying it was time to give the broadcaster “more commercial flexibility”.
The minister said she wanted to bring in a new statutory duty on the C4 board to focus on long-term sustainability, saying her “intention is to be clear … that we expect them to achieve greater sustainability”.
But the culture secretary also said wanted to see the government give C4 “more tools” to help maximise “the growth they provide to the creative sector and the regions”.
Labour, strongly opposed to the sell-off, said the decision announced by ex-culture secretary Nadine Dorries in April 2022 had been “a complete waste of everyone’s time”.
Lucy Powell MP, Labour’s shadow culture secretary, said: “The Conservatives’ vendetta against Channel 4 was always wrong for Britain, growth in our creative economy, and a complete waste of everyone’s time.”
She added: “Our broadcasting and creative industries lead the world, yet this Government has hamstrung them for the last year with the total distraction of Channel 4 privatisation.”
Ms Dorries, having announced the move as part of the government’s Media Bill, argued that government ownership was “holding Channel 4 back from competing against streaming giants like Netflix and Amazon”.
But senior Tories Jeremy Hunt and Tom Tugendhat, now in government, were among those who opposed the sale, warning it would cost the TV sector jobs in the north of England due to the loss of regional programming.
Labour described the plan as “cultural vandalism” and Channel 4’s former head of news Dorothy Byrne had said the move was designed to “throw a bit of red meat to Tory supporters of a very right-wing nature”.
Ms Donelan, who was appointed by Liz Truss and remained in the role after Mr Sunak took at No 10, had previously cast doubt on plans to privatise the broadcaster.
Responding to the leaked letter, a spokesman for the Department of Digital, Culture, Media and Sport (DCMS) said: “We do not comment on speculation. The DCMS Secretary of State has been clear that we are looking again at the business case for the sale of Channel 4. We will announce more on our plans in due course.”