Classic FM owner GWR unveiled plans to sell its overseas interests and focus on opportunities in the UK radio industry.

The future of London News Radio is also under review with GWR and its other shareholders close to concluding the process.

Executive chairman Ralph Bernard said the GWR's decision to focus on its domestic market would allow the group to play a central role in any change.

He said: "The UK radio industry is likely to show the strongest growth of any commercial radio industry in English-speaking countries.

"Therefore, we have decided to concentrate our activities in the UK."

The move comes after a seven per cent fall in like-for-like advertising revenues across GWR's national and radio stations in the year to March 31.

Pre-tax profits tumbled to £7.7 million, before one-off costs, 63 per cent below the £20.7 million recorded in the same period a year ago.

Group turnover edged up to £128.4 million from £127.2 million.

Mr Bernard said the year had been brutally difficult in the advertising market but there were signs of recovery ahead of the World Cup.

The first quarter of the current financial year was likely to show marginal growth in advertising revenues on a year-on-year basis.

GWR's owns a 25 per cent stake in DMG Radio in Australia but said it had decided to dispose of the holding, worth about £45 million.

It is also selling radio stations in Austria and eastern Europe.

Capital Radio was reported to have held informal talks with GWR about a £1 billion merger with the group.

But GWR dismissed the report saying it was not in merger or acquisition talks with Capital or any other party in the industry.

The Communications Bill, announced last week by the Government, is set to allow cross-ownership in the media industry and pave the way for non-European players to enter the UK.