The government has decided to push ahead with plans to privatise Channel 4.

Ministers have concluded, following a consultation, that while the broadcaster is “currently performing well” its public ownership is “holding it back in the face of a rapidly-changing and competitive media landscape”, a government source said.

A spokesperson for Channel 4 said it was “disappointed” with the decision but would “continue to engage” with the government on the process to “ensure that Channel 4 continues to play its unique part in Britain’s creative ecology and national life.”

Expectations that Channel 4 is to be privatised have been growing in recent months and the government source said it was now “expected to pursue a sale”.

The source added: “C4 is a great business with a strong brand built around it being creative, innovative and distinctive but a change of ownership will remove its straitjacket, giving C4 the freedom to innovate and grow so it can flourish and thrive long into the future and support the whole of the UK creative industries.”

Ministers will seek to reinvest the proceeds of the sale in independent production and on “levelling up wider creative skills in priority parts of the country”.

Channel 4 will remain a public service broadcaster and the government will ensure it “continues to make an important social, economic and cultural contribution to the UK” including a commitment to prime time news.

Ministers are understood to believe that in order to compete with the increasing power of US streaming giants such as Netflix, it must have more freedom to borrow money or raise private sector capital.

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