Unilever has signed what it believes is the largest advertising deal of its kind with ITV, it said today.

The company has committed to paying £320 million over four years to promote its household brands, including Birds Eye and Persil, on ITV1.

The deal is a massive boost to broadcasters Carlton and Granada, which handle airtime sales for the whole ITV network.

Both companies report results for the first half of their financial year this week and they are likely to be heavily scarred by the collapse of ITV Digital.

Today's deal also reflects a growing feeling in the City that the advertising market is beginning to recover from the economic slowdown.

Advertising on ITV is up on an annual basis for the first time this month and should show year-on-year growth of around 6% in June.

A Unilever spokesman said the tough conditions in the advertising market had enabled the group to "drive a hard bargain" with ITV.

But he added: "We feel we have got a good deal but it's also a fair one."

ITV marketing director Jim Hytner said Unilever's decision was a "major vote of confidence" for the network.

"This is major vote of confidence in ITV1 and confirms television's position as the most powerful advertising medium," he said.

"ITV1's offer to advertisers is unique in terms of impact and coverage making it a perfect fit with Unilever's leading brand portfolio."

The deal will buy Unilever a huge slab of airtime to promote the likes of Persil, Lynx deodorant and Magnum ice-cream on prime-time television.

The three parties have been in talks since the start of the year and the deal has been backdated to January 1. It will run until the end of 2005.