Sir Michael Bishop, who was tipped as the favourite to become the new chairman of ITV, has pulled out of the race.

He reportedly conducted a review of the company’s prospects and decided that the poor state of its board and shareholder tensions meant it was not worth taking the job on.

He is the second frontrunner to quit the race in a week, after Sir Crispin Davis pulled out.

Bishop is a former chairman of Channel 4 and previously ran the airline BMI. He ran BMI from 1972 before selling his 50 per cent stake to German carrier Lufthansa for £223 million in July. He turned it into the UK’s second-biggest airline.

ITV has been searching for a replacement for Grade for five months. Other candidates for the job include Sir Christopher Bland, the former BBC chairman and ex-Unilever chief executive Niall Fitzgerald.

The company has also announced that John Cresswell, its chief operating officer, is to leave. He will become interim chief executive until a replacement can be found.