Lord Burns to lead Channel 4

Terry Burns, the veteran economist and City stalwart, is set to assume the chairmanship of Channel 4 as the troubled broadcaster struggles to emerge from the financial doldrums.

People familiar with the situation said that Lord Burns, a former chairman of Marks and Spencer (LSE: MKS.L - news) , would replace Luke Johnson as Channel 4 chairman at the start of 2010. His appointment might be announced before the end of this week.

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

Lord Burns had at no point been publicly linked with the role since Mr Johnson confirmed he would leave when his term expires in January. His first task will be to appoint a new chief executive to replace Andy Duncan, who leaves next month.

Channel 4, which faces a funding shortfall amid the advertising recession, will benefit from Lord Burns' financial experience and connections.

He was the Conservative government's chief econ­omic adviser between 1980 and 1991, and permanent secretary of the Treasury from 1991 until 1998, as well as serving on the House of Lords' economic affairs select committee. He enjoys walking tours with his fellow Liverpudlian, Lord Birt, the former BBC chief.

One UK media chief executive said of the appointment: "It's a good choice because they need this kind of sensible big hitter who will do what needs to be done to Channel 4."

Another senior industry insider said it was a "predictable and depressing choice. A safe institutional figure is not what the organisation needs."

Lord Burns conducted a review of the BBC's charter for Tessa Jowell, then culture secretary, in the middle of the decade. He earned the nickname "Teflon Terry" for his continuing business success after serving as a Treasury adviser under John Major when the pound was forced out of the exchange rate mechanism in 1992.

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

The cross-bench peer also chairs Abbey, now part of Santander (Madrid: SAN.MC - news) , and has 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) , the owner of the Financial Times. He conducted the government's inquiry into hunting with dogs in 2000.

Jeremy Hunt, the shadow culture secretary, has indicated in an FT interview that a Conservative government, if elected, would not push for the privatisation of Channel 4.

But RTL, the owners of Five, are still privately hopeful that some kind of deal could be done to combine the broadcasters.

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