GCAP MEDIA will deal a blow to government hopes of increasing the take-up of digital radio tomorrow by selling its majority stake in Digital One, the national platform of channels, for a token £1 to partner Arqiva.

The commercial radio group, owner of Classic FM, is turning its back on the technology to save money in the face of a possible £313m takeover from Global Radio.

Fru Hazlitt, GCap’s new chief executive, will also pull the plug on the group’s remaining digital-only stations, Planet Rock and The Jazz as part of her turnround plan.

The measures, which will save GCap about £8m a year, are a break with the past. Under Hazlitt’s predecessor, Ralph Bernard, GCap poured at least £80m into digital radio.

Analysts believe GCap must pledge to at least double earnings by 2010 from the £19m forecast for the year to March to stay independent.

Separately, Global Radio is bidding for Virgin Radio. First round bids for the £70m-rated station, being sold by SMG, are due in this week.

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