The British government will sell Channel 4, the publicly-owned but commercially funded broadcaster founded nearly 40 years ago as an edgy alternative to the BBC and ITV ITV.L, the company said on Monday.

Ministers said last year that privatisation would help secure Channel 4’s future as a public service broadcaster.

The broadcaster, however, has fought such a move, saying there was no evidence to show that a privatised Channel 4 would be able to better fulfil its remit to provide challenging and distinctive programming for audiences under-served by rivals.

Channel 4 said in a statement on Monday it was disappointed the government had not formally recognised the significant public interest concerns which had been raised.

It had demonstrated it could “continue to commission much-loved programmes from the independent sector across the UK that represent and celebrate every aspect of British life as well as increase its contribution to society, while maintaining ownership by the public”, it said.

Chief Executive Alex Mahon told staff in an email widely published on Twitter that the broadcaster had presented a vision for its future that was “rooted in continued public ownership”.

However, she added that ultimately its ownership was for the government to propose and parliament to decide.

A government source confirmed the decision. “Ministers have decided that, although C4 as a business is currently performing well, government ownership is holding it back in the face of a rapidly-changing and competitive media landscape.”