ITV wants to slash £150m from its budget for public service broadcasting such as news, regional and children’s programmes by 2012, when the analogue television signal will be switched off.

It is calling on Ofcom, the regulator, to permit a sharp slide in ITV’s licence requirements over the next three years - a slide that will track the decline in the value of the analogue television spectrum over which it now broadcasts.

Michael Grade, ITV’s executive chairman, believes that beyond 2012 the economic value of subsidised spectrum will be worth £40m a year and he is proposing to spend no more than that on public service broadcasting.

The move would leave the channel free to fill its schedule with entertainment and drama, which is more appealing to advertisers. Grade is desperate to take out costs from ITV, which is struggling with a downturn in advertising that has hammered its share price, bringing it down to 50.6p last Friday.

ITV’s proposal is contained in a submission to Ofcom, which is reviewing the future of public service broadcasting. ITV’s public-service role has gone from being a financial benefit to a burden as audiences have fragmented over the past decade.

ITV is spending £190m a year on public-service output, a requirement of its licence, which grants it the use of cheap spectrum. However, the broadcaster calculates that the economic value of the spectrum has fallen to £220m because almost 90% of British homes have already switched to digital.

ITV has already reduced its children’s output and is making a series of cuts in regional news. It is gambling that, by proposing to spend so little, it can retain public-service status, which is also held by the BBC, Channel 4 and Five.

If ITV does not maintain this status, it could also lose its lucrative slot at the top of Sky, Virgin Media and Freeview’s electronic programme guides.

ITV’s submission stops short of proposing to hand back its analogue licence early, a move that Grade has threatened before but which would result in a financial penalty.

Meanwhile, the BBC is fighting against the idea of sharing its licence fee with other broadcasters to ensure there is more than one producer of public-service content beyond 2012. Instead, it is proposing to share regional resources with ITV and help commercial rivals sell their shows overseas.

An ITV source said: “The digital switchover has already happened, so we need a settlement that delivers a steep tapering of ITV’s regulatory burden from the start of 2009 through to analogue switch-off in 2012. And that means we need to have agreed a deal that marries shareholder interest with public good by the autumn.” Ofcom will report its findings later this year. Britain’s radio industry will this week call on the government to approve a mass migration of radio listening from FM to digital between 2015 and 2020. The move, designed to give a shot in the arm to digital radio a decade after it was launched, falls short of demanding that the culture minister, Andy Burnham, fixes a date to switch off the FM signal.

The government-approved working group includes representatives from the BBC, commercial radio and the car manufacturers.

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