GRANADA and Carlton have pledged to create a "bigger and stronger" ITV following Government backing for their £4bn merger.

The media pair remain on course to join forces in January after Trade and Industry Secretary Patricia Hewitt attached less stringent conditions to the deal than many analysts had anticipated.

Ms Hewitt said the merger, which unites the owners of 12 of the network's 15 regions, would create an enlarged ITV that is more equipped to compete with rivals, including BSkyB and the BBC.

The two companies welcomed the terms, adding that the end result would be better television for viewers and advertisers.

Following an inquiry by the Competition Commission, Ms Hewitt said the pair must agree to conditions including "behavioural" remedies that maintain rates for advertisers and offer discounts if ratings fall.

An independent adjudicator will oversee the application of the system, while the new ITV must agree to further proposals to safeguard other licensees, including Scottish Media Group - owner of Grampian and STV.

There had been fears that the pair would be forced to sell their sales houses in order to allay worries a merged broadcaster would have too much power.

The two companies hold about 52 per cent of the television advertising market.

But selling off the two advertising houses would have cut the estimated £55m annual cost savings from the merger by as much as £20m. Job cuts are inevitable in the merger.

Granada and Carlton will now be given until November 7 to prove to the Office of Fair Trading that a package of measures recommended by the Competition Commission can be implemented.