ITV has clashed with Channel 4, its rival, over the potential scale of declining advertising in the crucial period running up to Christmas.

Britain's largest terrestrial commercial broadcaster argues that the rate of falling television advertising should slow in November to less than 5 per cent, dismissing forecasts by Channel 4 of a potential drop in revenues of as much as 10 per cent.

The broadcaster of Coronation Street said that trading remained difficult but added that advertising bookings for October and November were holding up better than Luke Johnson, the chairman of Channel 4, had predicted on Friday. ITV executives believe that Channel 4 is overstating the autumn decline to boost its case for public subsidy to prop up its deteriorating finances.

Mr Johnson said that bookings were 10 per cent lower in October than last year, while ITV estimates that October bookings are down 4 per cent to 7 per cent for the whole television market on last year. The October fall, although still significant, is a marked improvement on September, where bookings were down by nearly a fifth, igniting fears that commercial broadcasters could be heading into a severe recession.

Both broadcasters believe that November, a key month for television advertising, should be better. The forecasts, particularly for November, are still preliminary and could change significantly in the next few weeks. However, they do suggest that advertisers are trimming marketing budgets by starting pre-Christmas spending later in the year.

Channel 4 wants £150 million a year in subsidy to prop up its finances, with cash possibly coming from the BBC licence fee. However, Andy Duncan, the chief executive of Channel 4, said that he was confident about the accuracy of his forecasts and said that the broadcaster of Big Brother would publish further figures in September.

On Saturday, Mr Duncan urged the Government to bring forward the timetable for the Communications Act - projected to be enacted in 2012 - because “quality British programmes are more under threat than a lot of politicians realise”. Channel 4 has already given warning that it will cut its £625 million programming budget.

ITV is committed to maintaining its existing level of spending on programmes of about £1 billion, Rupert Howell, ITV's commercial director, said at the Edinburgh Television Festival, arguing that content would save ITV. This strategy could lead to reduced profits if revenues fall.

Mr Howell said that the next 8 months were going to be extremely tough and predicted that 2009 could bring zero or negative advertising growth. However, he added that “advertising has survived many more scares than this”.

ITV earned £138 million last year, after generating net advertising revenue of £1.49 billion. Channel 4's profits totalled £1.6million in the same period, following £825 million of advertising. Its income was depressed by its digital investment.

Elsewhere, Johnston Press, publisher of The Scotsman and Yorkshire Post, is likely this week to underline the difficulties caused by falling advertising. It is expected to ditch its interim dividend and write off £100million when it reports interim results on Wednesday.

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