ITV is unlikely to win a relaxation of the rules preventing it from increasing the price it charges for advertising until 2010, a year later than it had hoped, the Office of Fair Trading revealed yesterday.

The commercial broadcaster, which has been suffering from a collapse in advertising income, will also have to contend with fierce opposition from major advertising agencies, who believe that ITV’s airtime sales should continue to be carefully regulated.

ITV said yesterday that it would be making “the strongest possible representations” to the OFT “to conclude the process a year from now”. Crucially, that opens up the possibility of a new regime coming into place in time for the 2009 trading season, as hoped for by the City.

However, the OFT, announcing a long-awaited review, said that it “would not report back before 2009” as it expected to undertake many months of work after the review process formally begins at the start of next year. That timescale - without allowing for appeals or any other complications - pushes back the prospect of an easing of the rules until 2010.

At issue is the contract rights renewal (CRR) mechanism, which was put in place in 2003 at the time of the Carlton-Granada merger that created ITV plc. Essentially, CRR prevents ITV from increasing its prices to compensate for lost audiences, and forces it to offer advertisers the terms that were available in 2003.

The mechanism has been particularly painful for ITV, which suffered a sharp loss in audience share on its core channel in 2005 and 2006.

Advertising revenues are determined at the turn of each year, based on last year’s audience performance: in the first half of this year, ITV1 advertising revenue was down 9 per cent at £595 million in a flat market.

Media buyers, who place advertising on behalf of companies, are also sceptical of whether ITV can justify a big change. Jim Marshall chairman of the Publicis-owned Starcom UK, which handles Procter & Gamble and Cadbury, said: “The time is not right for relaxation: ITV still has over 40 per cent of the market - it is the only broadcaster that could offset a decline in audience by increasing prices.”

Nigel Sharrocks, chief executive of Aegis Media UK, whose Carat agency handles the Renault and Asda accounts, was slightly more sympathetic. “I don’t think the advertising community are going to accept a free for all, but there could be scope for the introduction of a son of CRR.”

Michael Grade did not comment yesterday, but the ITV executive chairman has been lobbying for months behind the scenes to persuade regulators to reexamine CRR.

He has previously argued that the mechanism depresses the overall television advertising market, and puts ITV’s £1 billion a year investment in programming at risk because advertisers don’t have to support investment in costly mass-audience television.

Last year ITV accounted for 42.5 per cent of the television advertising market, down from 47.2 per cent the year before. Channel 4, the next biggest player, accounted for 19.2 per cent.

ITV shares eased 1p to 110.8p.

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