The future of XFM was thrown into doubt by the surprise announcement by owners GCap Media that it intends to dispose of or return the license to Ofcom by the end of March.

In a statement, GCap explained that the closure of XFM, which is accompanied by similar licence handovers of the Manchester and South Wales regional stations, as well as digital stations theJazz and Planet Rock brands, was to “focus on the brands that we believe offer the greatest growth potential, and to dispose of or close those that do not.”

The handovers will all be implemented by 28 March 2008.

Andy Niblett, head of Feather Brooksbank’s broadcast team said the news was a disappointment for advertisers to lose such a niche platform.

“It is always good for advertisers and listeners to have a choice,” he said. “XFM provides a different offering to the heritage stations in the central belt. Hopefully another company will step in and avoid a closure situation. Choice is always good, and to reduce choice is not good for the central belt.”

GCap acquired XFM’s progenitor station Beat 106 in 2000 for £33m.