The privatisation of Channel 4 looks set to be scrapped as Rishi Sunak prepares to ditch controversial plans by Boris Johnson.
The shamed ex-PM, humiliated when the station replaced him with a melting ice block and a senior figure called him a “known liar”, had planned to flog Channel 4 after 40 years of public ownership.
But his plan prompted a furious backlash - and was ‘re-examined’ when Liz Truss took power.
Now Culture Secretary Michelle Donelan has written to Mr Sunak confirming she plans to ditch the sale.
In a letter obtained by The News Agents podcast, she said: “After reviewing the business case, I have concluded that pursuing a sale at this point is not the right decision.
“There are better ways to secure Channel 4 Television Corporation (C4C)’s sustainability and that of the UK independent production sector.”
Her letter, dated Tuesday, sought permission from the PM and a sub-committee of the Cabinet.
This means the policy is not yet final - but this stage is one of the last in forming a new policy, and usually comes after behind-the-scenes talks.
She said she planned to announce the U-turn “as soon as possible” and it “is likely to be popular with a majority” of MPs, “particularly those who raised concerns”.
Channel 4 is publicly owned and non-profit but receives no taxpayer cash, instead being funded entirely through its commercial activity.
Yet hardline Tory Nadine Dorries tried to push through the sale when she was Culture Secretary, after wrongly claiming it was "in receipt of public money".
Downing Street declined to comment on leaks, or on whether Mr Sunak backed Ms Donelan's plan.
Ms Dorries lashed out at the leaked letter, fuming on Twitter: "Three years of a progressive Tory government being washed down the drain. Levelling up, dumped. Social care reform, dumped. Keeping young and vulnerable people safe online, watered down.
"A bonfire of EU leg, not happening. Sale of C4 giving back £2b reversed. Replaced with what?"
But Labour's shadow culture secretary Lucy Powell 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.
"Our broadcasting and creative industries lead the world, yet this government has hamstrung them with this total distraction."
She added: "Labour opposed this sell off, and took a strong stand. Government must now bring forward the Media Bill to protect and promote Britain's broadcasters in the streaming age.
"Whilst the Conservatives crash our economy, we have a plan to nurture and grow our creative industries."
Simon Hoare, Conservative MP for North Dorset, tweeted: "A welcome and excellent decision/recommendation by michelledonelan: if it ain't broke; don't fix it!"
Stephen Hammond, Conservative MP for Wimbledon, added: "I welcome the reports that C4 will not be privatised. I have always thought that its commercial future can be more sustainably secured by a new mandate within the current model.
"This decision will ensure the independent UK production industry will continue to thrive and prosper."
Boris Johnson planned to allow the sale of Channel 4 through a Media Bill which was announced in the Queen’s Speech in May.
A previous government review warned "this is 2021, not 1982" with increased competition from services like Netflix.
But the Bill has still not been introduced to Parliament after the turmoil of the last six months.
In her letter to the new PM, Ms Donelan argued the channel’s role in supporting independent production - worth £3bn to the economy - "would be very disrupted by a sale at a time when growth and economic stability are our priorities".
Instead, Channel 4’s board will have a new legal duty to “have a clear focus on the long-term sustainability of the business”.
The channel will also be given more “commercial flexibility”, including making some of its own content and potentially borrowing more than its £200m limit.
Channel 4 will also double the number of roles based outside London from 300 to 600 in 2025, the letter said.
Lib Dem MP Jamie Stone said: "Of course, this is good news - the threat to sell of Channel 4 was nothing more than a culture war waged by a rash and reckless Cabinet.
"But for this Government to be doing the exact opposite to the last just goes to show how divided the Conservatives are. I think they need a break.
"The public need to know exactly how much taxpayer's money the Government wasted on these fruitless plans, and how much money is wasted every time a new Cabinet member comes up with another impetuous vanity project."
A Culture Department spokesperson said: "We do not comment on speculation.
“The Secretary of State has been clear that we are looking again at the business case for the sale of Channel Four.
“We will announce more on our plans in due course."
