City analysts are becoming increasingly concerned over the future of ITV Digital, according to industry publication Broadcast.

The news comes one week after Carlton and Granada appointed Deloitte & Touche to restructure the business. Channel and content contracts, such as one with the Nationwide Football League, are currently contributing to massive losses at the business. The accountancy firm is pursuing a strategy of renegotiating content contracts; firstly, to try and cut the losses of the ITV Sport Channel, and to try and reduce the amount of money the broadcaster pays to BSkyB and Flextech to carry its channels. Each of these moves is likely to prove tough resistance from the content providers. The City is now warning that unless such content contracts can be renegotiated, ITV Digital is facing a very uncertain future.

One City analyst has recommended to Broadcast that the company be frozen, and the subscribers handed over to digital satellite broadcaster, BSkyB. "The view in the City is that ITV Digital should freeze the business and either hand over its subscribers to Sky or stop marketing for new subscribers and operate a scaled down service."

More on the ITV Digital situation coming up on Digital Spy as it develops.