The head of Warner Bros in the UK has suggested the sale of AOL by Time Warner, the group’s parent company, would be a serious setback for the group’s digital ambitions.

According to reports last week, Microsoft is talking with Time Warner about taking a stake in AOL, the online portal business. The deal could involve Microsoft’s search technology replacing Google’s on the AOL site.

But Josh Berger, the managing director of Warner Bros Entertainment UK, has warned against his company selling off its internet interest.

He said that the internet portal could provide a platform over which Warner Bros content, which includes the Harry Potter films and television series such as The West Wing, could be distributed. : "AOL would be helpful to that process," he said.

He then added: "So we’re going to keep AOL."

Mr Berger said that one of the challenges was potential customers asking "how do I know what I want if I haven’t seen it yet?" as new media formats are developed to harness the spread of broadband internet access.

Mr Berger was speaking at the Royal Television Society Cambridge Convention on Saturday.

Large internet companies such as Yahoo! have already declared an interest in developing global distribution platforms to deliver films, music and sports coverage to people’s homes.

Mr Berger said companies such as Yahoo! could be "considered a friend" that provide large audiences.

However, media producers are worried that the internet giants could squeeze their profits if they have too much bargaining power.

Mr Berger said: "If in the future Yahoo! and Google are the only ones out there, then they are going to be foes."

Earlier in the same event, Terry Semel, the chief executive of Yahoo!, said that he wanted to develop a global internet television network, and invited British broadcasters to provide programmes that his company could distribute.

The American wants to start commissioning his own programming, and work with broadcasters in unlocking their archives as part of a strategy to be "not a product company but a major distribution platform".

Yahoo!, which began life as a simple internet search engine, has already begun showing television online. This month, the website gave a debut to Supernatural, a week before the television programme appeared on the WB Network in America.

Yahoo! also believes that global internet advertising, currently worth $22 billion, is growing at 8 per cent a year, although it still accounts for only 3 per cent to 5 per cent of the total advertising market.

He said he had decided against launching AOL in China because the government wanted to monitor messages sent on it.

"We made a judgement it wasn’t a market we wanted to enter at this time," he said.

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