UK's Channel 4 has abandoned its entire radio project, dealing a huge blow to the future of the DAB sector, as it seeks to make £100m (E128m) in savings. C4 said it would close its radio division with the loss of up to 15 jobs, saving an estimated £10m in 2009.

The broadcaster was to launch a series of radio stations, including a competitor to BBC Radio 4, and youth music channel E4 Radio, as part of a second digital radio platform that would carry a host of other new channels. Channel 4 said it would inform its fellow shareholders in 4 Digital Group, which would have run the second national commercial digital radio multiplex.

The future of commercial digital radio was already uncertain with the closure of a number of stations including GCap Media’s TheJazz.

Commercial radio groups have been reluctant to invest further in the platform because, despite encouraging takeup of digital audio broadcasting (DAB) radio sets – as a result of persistent BBC promotion, they have been unable to make it pay.

The Channel 4 chief executive, Andy Duncan, who was previously a big champion of Channel 4’s radio ambitions, said: “We’ve taken this decision very reluctantly. “We’ve pursued our radio plans in good faith and continue to believe DAB has a strong future and that we could make a return from radio in the medium term. Frustratingly, our plans have been overtaken by a drastic recent downturn in our revenues and we will have to forgo this future profit stream."

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