Up to 60 jobs are under threat after Five dropped ITN as its news provider and handed the £35m five-year contract to Sky News.

Although Kirsty Young will continue to present Five’s flagship bulletins at 17.30 and 19.00, it is uncertain how many ITN reporters, producers and technicians will be recruited by Sky News when it takes over the news service on 1 January 2005.

While Sky News will also employ 60 reporters, producers and technicians for the new contract, an insider suggested that only half of these would come from the ITN team. Five senior programme controller Chris Shaw said: “Five will honour its legal and moral obligations to the news team.” He added that the change was a “difficult decision” but ultimately “this will mean a bigger, better news for our viewers”.

The deal - which at last gives the Rupert Murdoch-backed satellite broadcaster a toehold in primetime terrestrial TV - will provide Five with a purpose-built studio in west London and access to key Sky reporters and news from Sky’s eight regional and seven international bureaux in cities such as Washington, Moscow and Delhi.

When Sky faces such as political editor Adam Boulton appear on the new service, they will describe themselves as Five reporters.

The move is a major blow for ITN as the estimated £6m a year it receives from Five for the contract equates to around 6% of its profits. ITN chief executive Mark Wood branded Sky’s offer “aggressive”. Sky has already helped cut ITN’s income. It backed the Channel 3 News consortium that pitched against it for the ITV contract in 2001, slashing the price of the deal by £10m a year.

Wood said: “I was very surprised at the news as we were still in discussion on aspects of the bid. I am slightly disappointed that we weren’t given more time.

“I am proud of what we have achieved with Five and we have helped establish its station identity. We were also steadily growing its ratings. But it has gone for a proposal that is both predatory and aggressive. Our pricing was very realistic and anything below cost price seems questionable. We would not chisel the price down.

“However, Five is the smallest contract of all our business and we have secured new contracts recently that keep ITN in good shape.”

But head of Sky News Nick Pollard defended the offer and said: “We would not have entered this contract race on the basis of being loss-making.”

The deal extends Sky’s existing relationship with Five. It has made Five breakfast news show Sunrise , which airs from 06.00 to 06.30 each weekday, since 2001.