Channel 4 has dropped its plans to launch three digital radio stations, starting with E4 Radio which was due to go on air next spring, according to the BBC.
The broadcaster is blaming a slump in advertising, with C4 chief executive Andy Duncan saying the plan had become "unaffordable". C4 is expected to save £10m in 2009 by abandoning the stations.
Channel 4 was part of a consortium due to open 10 digital radio stations. The 4 Digital group was awarded a 12-year licence to run a digital radio multiplex in July 2007, and partners included BSkyB, Bauer Radio and Carphone Warehouse.
Media regulator Ofcom says talks will take place to assess the future of the project.