Big Brother: One of Bazalgette's creations

Announcing her decision in the trade magazine Media Week, Airey said: "I very much see my future here at C5 as long as the shareholders are happy with me.

"To be frank, I think it's more of a challenge to stay here. The person who will get the job will have to have great diplomatic skills for it's really a senior civil service."

'Very happy'

Airey was seen as a frontrunner for the Channel 4 job because she has worked closely in the past with Channel 4 director of programmes Tim Gardam and stratetgy director David Brook.

A spokesman for Endemol said Bazalgette was also "very happy" where he was.

He said that Bazalgette, who is Endemol's creative director, had thought "long and hard" about it and concluded that "now was not the right time".

Airey: Has worked with C4 head of programmes

Bazalgette's high profile stemmed from the huge popular success of Big Brother - which was made by his company, Bazal, a part of Endemol.

The Independent newspaper singled out the BBC's director of television, Mark Thompson, as a potentially strong candidate.

The newspaper also named former BBC head of science Jana Bennett, former ITV chief executive Richard Eyre, Labour peer Lord Alli and Peter Fincham, head of the independent production company Talkback.

The Financial Times also tipped Mark Thompson for the post, along with Peter Fincham, who it noted may have "contractual issues".

It also listed Lor Alli and Adam Singer, chief executive of cable operator Telewest.

Jana Bennett was named as "an outsider".

There may also be internal candidates who have not emerged in public.