Luke Johnson, the chairman of Channel 4, has given warning that the Big Brother broadcaster will have to cut its £620 million programming budget as it grapples with a severe downturn in advertising.

A collapse in September bookings - down by about 20 per cent across the television industry - looks set to be followed by poor trading in the critical pre-Christmas season, according to the broadcaster's advance booking data.

Mr Johnson, speaking on the sidelines at the broadcaster's autumn season launch, said that on Channel 4 estimates, bookings are down by 10 per cent in October, and by between 5 per cent and 10 per cent in November and December. “In looking at the programming budget, we are going to have to be mindful of the stresses out there,” Mr Johnson told The Times. “It won't be much better for our competitors, except for the BBC.”

Julian Bellemy, head of programming, Channel 4, endorsed the chairman's forecast of cutbacks.

Adding to the gloom were dismal figures from Gannett, the US newspaper publisher, which owns the Newsquest chain of British regionals including The Herald in Glasgow. Classified advertising at Newsquest plunged 24per cent in July, the steepest single monthly fall yet, and property advertising is nearly half what it was.

Channel 4 will review its programming budgets next month and go public with the level of cuts it believes it needs to remain profitable. It will also reveal more information about trading, as it steps up its lobbying for a £150million year subsidy to supplement its income from advertising.

Ofcom, the regulator, is gearing up to publish its interim conclusions on the future funding of public service broadcasting. One option under consideration is for part of the licence fee to be diverted from the BBC and handed to Channel 4.

Channel 4, which spent £624 million on screen in 2007, had been expected to trim its spending this year. The collapse in advertising in the autumn and run up to the holidays means that television advertising will be down 4 per cent to 5 per cent during the whole of 2008. Channel 4 is trading slightly ahead of the overall market, because of the healthy performance of its digital channel More4.

Last year Channel 4 generated £825million from advertising, in a year when it made a modest profit of £1.6 million. A 4 per cent fall would mean £32 million in lost revenue, tipping the broadcaster into loss, unless savings could be found elsewhere, and a further 10 per cent fall in 2009 would see nearly £80 million eliminated.

Mr Johnson has also asked Channel 4 to draw up a scenario in which television advertising falls by a further 10 per cent in 2009, an outcome far worse than is forecast by industry analysts.

“I believe that next year could be the worst year yet for the economy,” said Mr Johnson, whose interests also included the Borders bookshops and the Giraffe chain of restaurants.

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