Rishi Sunak is expected to shelve the proposed privatisation of Channel 4 after a backlash against the move from within his own cabinet.

Industry insiders expect the sale of Channel 4 to be dropped from the upcoming media bill as the prime minister overhauls policy pledges, according to the Financial Times.

“The decision to drop the sale of Channel 4 from the media bill has been signalled by Downing Street to industry and Whitehall,” the report said.

Under Boris Johnson, the government drew up plans to privatise the public service broadcaster, which is owned by the state but self-funded through advertising, as part of a wider effort to modernise the sector.

Sunak backed the move during his leadership campaign, arguing that Channel 4 needed a commercial owner to help it survive the rise of streaming services such as Netflix and Amazon.

He is now believed to be reviewing some of his campaign pledges as the recent market turmoil shifts Downing Street’s economic priorities.

Sunak has also faced opposition to the policy from members of his own cabinet. Earlier this year, Jeremy Hunt, now the chancellor, came out against the plans, saying it was important to maintain competition between Channel 4 and the BBC.

The environment secretary, Thérèse Coffey, praised Channel 4 at the broadcaster’s 40th anniversary celebrations this week, before leading attenders in a rendition of Happy Birthday.

“It’s likely that the government will want to quietly drop privatisation,” one senior Tory told the Financial Times. “It’s unpopular with some parts of the party, has a huge impact on our creative sector and the media bill can be pushed through without including it.”

Plans to privatise Channel 4 have been widely criticised amid concerns about the impact on the UK’s independent production sector, which relies heavily on commissions from the youth-focused broadcaster.

Channel 4 has previously said a sale would cost the economy £3bn and put many production companies out of business.

An industry source reportedly said: “It looks like the government has decided not to go ahead with Channel 4. It makes complete sense. The world and his dog knew it was a political move and there wasn’t really any evidence.”

Any move to shelve the sale would come as a major boost to Channel 4, which was founded in 1982 and has fended off a number of previous privatisation threats.

Ditching the Channel 4 sale would also raise questions about the future of the government’s media bill, which contains measures to ensure the prominence of public service broadcasters on on-demand platforms, and a new code to protect audiences from harmful material.

An industry insider said there was a “very good chance it gets pulled” if privatisation was shelved. However, the culture secretary, Michelle Donelan, insisted this week she was going ahead with the bill.

A government spokesperson said: “The culture secretary has been clear that we are looking again at the business case for the sale of Channel 4. We will announce more on our plans in due course.”

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