THE future of a planned merger between independent television companies Granada and Carlton now rests with the Government following the completion of the Competition Commission's report on the proposal.

Trade and Industry Secretary Patricia Hewitt is expected to deliver her verdict next month following a review of recommendations made by the commission.

She has 20 working days to consider the 456-page report into the £4bn merger.

It is unlikely she will overrule the commission's findings.

Analysts expect any approval to come with conditions attached, including the possibility of Granada and Carlton being forced to sell their advertising sales houses.

This would ease the fears of rival broadcasters and advertisers that the pair, who control 52 per cent of the ITV advertising market, would hold too much power if they were allowed to merge their sales operations.

ITV's joint managing directors, Mick Desmond and Clive Jones, have said such a move would undo much of the past year's work, including efforts to break down barriers between the two companies.

One alternative to selling the advertising houses could see a requirement for a proportion of ITV's airtime to be auctioned and traded on a secondary market.

Another proposal involves a mechanism allowing advertisers to extend current contracts on the same terms, with the right to reduce the amount of airtime if ITV's audience share declines.