Channel 4 will be steered towards privatisation by the UK government as soon as next year, with ministers launching a formal consultation within weeks on the future of the 38-year old public broadcaster.

Oliver Dowden, culture secretary, has decided to reopen the debate over the “best model” for the government-owned, privately funded broadcaster, including an outright sale, according to people briefed on the plans.

With a remit to commission edgy programming for a young and diverse audience, Channel 4 has been a launch pad for talent in Britain for decades, giving early breaks to Sacha Baron Cohen and Oscar-winning directors Steve McQueen and Danny Boyle.

Privatising the channel has been explored by ministers more than half a dozen times since the 1980s but has consistently been ruled out because of the likely impact on programming and the independent television sector.

Offloading the government’s Channel 4 stake was last rejected in 2016 and Boris Johnson made no commitment to a sale in the Conservative party election manifesto.

But ministers are convinced the fast-changing television market, the rise of global streaming services such as Netflix, and the need to repair the public finances have made revisiting the issue a matter of urgency. Options open to the government include a flotation, a sale to a private buyer, the sale of a minority stake or moving to a mutual ownership model.

The consultation would be overseen by John Whittingdale, the current minister for media and former private secretary to Margaret Thatcher. He first advocated a privatisation of Channel 4 in 1996 and oversaw the last exploration of a private sale in 2016 when he was culture secretary.

Dowden and Whittingdale want to make a decision by the end of the year on the most sustainable structure for Channel 4, with the aim of passing legislation to implement the changes by the end of 2022, according to people familiar with the discussions.

Had Channel 4 been sold in 2016, bankers expected the government to raise up to £1bn for the broadcaster, most probably from a US buyer. But since then the advent of streaming has eaten into the business model of traditional television companies, putting pressure on any sale price.

The broadcaster generated £985m of revenue in 2019, predominantly from advertising, and reported a pre-tax loss of £26m, which it attributed to the costs of opening its new headquarters in Leeds. It is expected to return a record surplus in 2020, with viewing and streaming audiences rising significantly.

Channel 4 declined to comment. Alex Mahon, chief executive, has previously said the broadcaster was “definitely financially viable” even in public hands.

The overriding importance of streaming to groups such as ViacomCBS, the owner of Channel 5, and Discovery, which is due to merge with HBO-owner Warner Media, could narrow the range of potential buyers for a business that is funded solely by advertising.

As a so-called publisher-broadcaster, Channel 4 also retains little or no ownership rights on hit shows such as The Great British Bake Off or Gogglebox — prized intellectual property that has driven a recent wave of media mergers.

The consultation on Channel 4’s future comes in parallel to a push to reform the wider regulatory framework for public service media, which could include measures that strengthen the commercial value of Channel 4.

Ministers are exploring reforms to guarantee the prominence of public broadcasters on digital platforms, and an overhaul of the so-called “terms of trade” between independent producers and commissioners.

The regulatory regime would be crucial in determining whether a new owner of Channel 4 would see commercial benefit in continuing as a public service broadcaster. Channel 4’s licence expires in 2024 and opponents of privatisation argue its public remit would effectively prevent it from making significant profits.

The department for digital, culture, media and sport declined to comment.

Patrick Barwise, a professor at London Business School who wrote a report on privatisation for Channel 4 in 2016, said that proposal was dropped because “the likely proceeds were small and the claimed benefits largely illusory”.

“All these factors still apply, if anything even more today,” he said, pointing to the risks to UK independent producers and C4’s public service remit. “In particular, the likely proceeds are probably even lower now.”