Ex-Treasury secretary to lead Channel 4

Lord Terry Burns, the former Treasury secretary and past chairman of Marks & Spencer, has emerged as the successful candidate for the chairmanship of Channel 4.

People familiar with the situation said that Lord Burns - whose name has not previously been linked with the role - will replace Luke Johnson as chairman at the broadcaster at the end of the year. An announcement could be made this week.

Other candidates under consideration included Richard Eyre, a former chief executive of Capital radio and ITV (LSE: ITV.L - news) , and Lord Alli, the Labour peer who founded Planet 24, a TV production company, and is the chairman of Asos (LSE: ASC.L - news) , the online retailer.

Ofcom, which has been conducting the search, and Channel 4 declined to comment.

The new chairman's first task will be to appoint a new chief executive to replace Andy Duncan, who leaves next month.

Channel 4, which is facing a funding shortfall amid the worst advertising recession for decades, would benefit from Lord Burns' financial experience, having served as the Conservative government's chief economic adviser between 1980 and 1991, and as permanent secretary of the Treasury from 1991 until 1998, as well as serving on the House of Lords' economic affairs select committee.

Lord Burns conducted a review of the BBC's charter for Tessa Jowell, then culture secretary, in 2004.

While he has never run a media company, Lord Burns has previously been considered for several senior advisory roles in the industry, including as a possible chairman of the BBC Trust, the broadcaster's governing body.

As well as conducting the government's inquiry into hunting with dogs in 2000, the cross-bench peer has also chaired Abbey and acted as a non-executive director of several FTSE companies, including British Land (LSE: BLND.L - news) , Legal & General (3166.KL - news) and Pearson (LSE: PSON.L - news) , owner of the Financial Times.

A small in-house team at Ofcom has conducted the search for Channel 4's chairman. Egon Zehnder was appointed to find a new chief executive and casted a wide net, including outside the UK.

Mr Duncan, who had claimed Channel 4 would face a funding shortfall of £150m by 2012, failed to secure a joint venture with BBC Worldwide to shore up the broadcaster's finances.