Channel 4 is being eyed for takeover by German group RTL, it has been reported.

RTL, which owns channel Five, is said to have asked investment bank JP Morgan to look at a possible takeover bid for Channel 4 as the UK broadcaster faces a funding crisis, according to the Sunday Times.

Any deal could reportedly cost RTL as much as £500 million and would come four years after previous merger talks between the two broadcasters hit the rocks.

Channel 4 is suffering from a funding gap and has previously warned that it would run out of money by 2012 if a solution is not secured.

The channel is State-owned, but it is funded by advertising, which has been hit severely amid the wider economic troubles.

Its advertising revenues are also set to come under pressure when the switch to digital broadcasting is completed and multi-channel TV begins to eats into its audience.

Regulator Ofcom recently estimated that Channel 4 could need extra funding of up to 100 million by 2012 to deliver its existing remit. The watchdog is considering options, such as handing over some of BBC's annual licence fee to Channel 4.

It has also been mooted by the regulator that one funding source for Channel 4 could be for it to take control of some or all of BBC Worldwide, the BBC's commercial arm.

But a bid from RTL would ease Channel 4's funding troubles and would fulfil RTL's long-held ambition to expand further in the UK.
It already owns more than 40 TV channels in 10 countries and has recently been rumoured to be interested in buying ailing rival ITV.

RTL was not immediately available for comment.