Bskyb warned today of a possible £20 million hit to profits if a row with Virgin Media leads to its basic channels being pulled from the cable network.
Virgin Media's contract to air Sky One, Two, Sky News and Sky Sports News ends at midnight on Wednesday unless the two sides can agree on a renewal price.
Bskyb said today that it hoped a deal could still be done but admitted Virgin Media appeared to have "walked away" from talks.
It estimated that, if an agreement was not reached in the remainder of its financial year to June 30th, it could see a reduction of between £15 million and £20 million in operating profits.
Virgin Media, rebranded from NTL earlier this month, claimed on Friday that Sky had tried to deliberately sabotage the negotiations by doubling the price of its channels.
Chief executive Steve Burch called Sky's behaviour "heavy handed and anti-competitive".
PA