The two firms now claim the tie- up will save them �100m rather than the �55m previously forecast.

The news came as both firms reported a profits rise, in what is expected to be their last update before ITV Plc begins trading next year.

Neither company detailed how the savings were expected to be made.

Carlton announced profits had surged 68% to �60m during the year.

Meanwhile, Granada reported better than expected results for the year - with profits up to �179m from �162m in 2002.

Cost cutting

ITV chief executive designate Charles Allen said: "We are making rapid progress towards completing our merger with Carlton to create a single ITV."

"Our investment strategy in ITV's schedule is working, cost savings are ahead of plan and we are generating strong cash flows."

The two groups said they had already made savings of �43m - �24m from Granada and �19m from Carlton - since October last year.

They added they had identified a further �57m in annualised savings to be substantially achieved by the end of the first full financial year after the merger.

Reduced sports costs in the schedule later in 2004 would provide further savings, they added.

The two companies said they planned to integrate certain broadcasting activities and improve efficiency.

Planned savings will also come partly from merging the companies' two head offices and corporate and back office functions and eliminating areas of duplication.

Job losses?

However, Mr Allen refused to give details of the number of staff who may be axed as a result of the merger, saying: "I'm not at liberty to quote any numbers."

Granada - which announced 175 redundancies at its Meridian subsidiary last week - employs about 6,000 staff while Carlton has about 2,500.

Trade unions have already called a ballot of Granada staff in protest at a pay offer.

Granada has offered staff a below-inflation 2% increase and rejected demands for a minimum salary of �13,500 a year.

The move by the National Union of Journalists, broadcasting union Bectu and engineering union Amicus is believed to have been partly prompted by fears that the savings could lead to wide-ranging job cuts.

Amicus said it wanted full consultation on any proposed cuts amid concerns the company "is trying to drive through massive changes without members' agreement".

Strike threat

If action is backed it could see more than a quarter of Granada's workforce walk out on strike.

Meanwhile, figures from both groups signal that advertising revenues are improving following one of the harshest recessions in advertising in recent memory.

But while Carlton forecast advertising revenues to rise in the last three months of the year, which include the key Christmas period, Granada warned it was facing a 1% fall.

The company said uncertainty over the merger process had put a dampener on sales.