Channel 4 yesterday confirmed the appointment of Mark Thompson, currently BBC director of television, as its chief executive.

Thompson replaces Michael Jackson, who left to become president and chief executive of USA Entertainment in October.

He will leave the BBC after Christmas, but not take up his new job until March 2002. Thompson is expected to earn more than $700,000 (£500,000) a year, around double his BBC salary.

Although he has no private-sector experience, Thompson will have to quickly get to grips with reshaping Channel 4's commercial strategy. He moved quickly to defend the role of 4 ventures, the operation which houses the loss-making FilmFour division (see main story).

Channel 4 has recently launched two digital networks, E4 and Film Four, and has had to make substantial cutbacks in its interactive division. Additionally, there is persistent talk that the UK government aims for partial privatisation of the channel in the next few years.

"The central role he has played in the development and realisation of the BBC's digital strategy combined with his long career in programme-making, mean he is ideally suited to lead Channel Four," said Channel 4 chairman Vanni Treves in a statement.

Long seen as BBC director general Greg Dyke's successor, Thompson was previously, director of national and regional broadcasting. He was appointed editor of the Nine O'Clock News in 1988 and editor of Panorama in 1990. He became head of features in 1992 and head of factual programmes in 1994, playing a key role in the performance of both BBC TV channels and introducing series such as Animal Hospital, Modern Times, The House and Ready Steady Cook.

More recently, Thompson oversaw the state broadcaster's bid to secure Government permission launch youth network BBC3.

Rivals for the job are understood to have included Michael Lynton, president of AOL International, Big Brother pioneer Peter Bazalgette and the co-creator of the Big Breakfast, Lord Waheed Alli.