ITV unveil BBC's Michael Grade as new boss

LONDON, Nov 28 (Reuters) BBC Chairman Michael Grade has resigned to become the boss of commercial rival ITV, providing a major coup for the ailing TV group and dealing a heavy blow to the world-renowned BBC.

Analysts said the charismatic 63-year-old was one of very few people who could rejuvenate Britain's biggest commercial broadcaster, which has lost audience, advertisers and its chief executive in the last year.

Its shares were up 0.9 per cent by 0430 hrs today at 113-1/2 pence each.

''My first priority at ITV will be to support the team in accelerating the improvement in programming performance for our viewers and advertisers,'' Grade, who was named executive chairman, said in a statement.

The BBC said it was disappointed to be losing their chairman and said the announcement was a surprise.

Jeff Randall, a former BBC business editor, who broke the story in the Daily Telegraph, said there was ''carnage'' at the BBC following the news and described one former colleague as saying that senior management was ''incandescent with rage''.

Grade was appointed as BBC chairman in 2004 for a four-year contract, joining the renowned broadcaster at a time of turmoil following its furious row with the government over the corporation's reporting in the run-up to the Iraq war.

In addition to improving morale, Grade was also tasked with the difficult job of negotiating with the government over increasing the licence fee -- a tax on Britain's television-owning households.

The department of Culture, Media and Sport is set to make an announcement by the end of this year on BBC funding.

''The timing of Michael Grade's departure to ITV could hardly be worse for the BBC,'' Robert Peston, BBC News' business editor, was quoted on the company's Web site as saying.

''As one member of the BBC board of governors put it to me, it's a mess.'' MORE REUTERS SSC BD1517