CARLTON and Granada, the two biggest ITV companies, aim to set up three unified divisions focusing on news, broadcasting and production if, as expected, the Government approves their £4 billion merger on Wednesday.

The Times has learnt that the merged company, to be called ITV plc, will place a particular emphasis on news. Michael Green, head of Carlton, who will chair the merged company, and Charles Allen, head of Granada, who will be its chief executive, will make high-quality news a platform on which to compete with the BBC and BSkyB. The pair have earmarked Clive Jones, joint chief executive of the ITV Network Centre, to run the new division.

Mr Jones’s fellow joint chief executive, Mick Desmond, of Granada, is tipped to become chief executive of the new broadcasting division, which will assume the responsibilities of both the network centre and a combined advertising sales operation.

Simon Shaps, chief executive of Granada Content, will run the third leg of the group, assuming responsibility for the merged operation’s production businesses.

Carlton and Granada insist, however, that the appointments will be tested in the market before an official announcement is made.

The companies yesterday denied a City rumour that there are plans to appoint a new chief operating officer. The merged group’s three divisional chief executives will report directly to Mr Allen. Shares in both Carlton and Granada are expected to surge this week with confirmation by Patricia Hewitt, Trade and Industry Secretary, that the two companies will be allowed to merge, subject to conditions.

In a report to Ms Hewitt, the Competition Commission is understood to support the merger provided the two companies agree a series of rules on buying and selling of television advertising. Ms Hewitt is highly unlikely to overturn the preferred option of the Competition Commission and risk wrecking the merger.

Both the Competition Commission and the Government want the merger to go ahead as long as the interests of advertisers can be protected. The aim is to create more competition in the wider broadcasting market by making ITV strong enough to compete more effectively against the BBC and BSkyB.

If it is confirmed that Carlton and Granada can merge without disposing of their sales houses, the consequences will be considerable. Mr Green and Mr Allen will be able to present the deal to their long-suffering shareholders as something of a triumph and the share prices of both companies are set to rise. Moreover, a merger will effectively deter an immediate swoop by US predators — which may spare the blushes of ministers.

With the help of an extra £100 million added to its programme budget this year, ITV has also just experienced the best year-on-year ratings period for ten years.