RTÉ intends to review its advertising sales operation in London because of changes brought about by the £4 billion (€5.64 billion) merger of Carlton and Granada.

RTÉ runs its London advertising sales operation with Carlton Media Sales; TV3 uses Granada Media Sales. Yesterday's merger means the two sales houses are likely to merge and this has implications for RTÉ.

TV3 has an exclusive arrangement with Granada Media Sales mainly because Granada owns 45 per cent of TV3. Because of this linkage, TV3 is expected to continue using Granada Media Sales.

But it would be difficult for RTÉ to maintain a link with an advertising house also used by its rival TV3. Advertisers are also likely to be uncomfortable with such an arrangement because of possible conflicts of interest.

An RTÉ spokeswoman said last night the implications of the Carlton-Granada merger were being studied closely and the station would assess what to do with the London operation.

It is understood both companies now get 10 per cent of their advertising revenue via agencies in London.

The merger of Carlton and Granada has few other implications for either station, although it should expand the range of programming available to TV3. It can now choose from a selection of Granada and Carlton programmes. Granada is the biggest producer of programming in Britain after the BBC. It is well known as the producer of Coronation Street.

The Granada-Carlton deal effectively creates a single ITV company. It was given the go-ahead by the British Trade and Industry Secretary, Ms Patricia Hewitt, yesterday.

Ms Hewitt said a merged operation would mean a huge boost for TV in the UK, creating healthy competition for the BBC and a growing Sky TV with more money available for "programming of high quality" in ITV, the UK's second oldest network after the BBC.

But Ms Hewitt did admit there would be some "adverse" effects of the merged operation because it would account for more than 50 per cent of the advertising market.

She set stringent conditions concerning advertising to allay advertisers' fears that the company would abuse its position.

But she decided not to impose potential deal-breaking conditions requiring both companies to sell their in-house advertising departments.

(Additional reporting - Guardian Service)