Channel 4 has confirmed it plans to restructure FilmFour, a move which will lead to job losses.

FilmFour Ltd will lose its distribution and international sales functions to concentrate on low-budget British films after much of its recent output proved to be expensive box office flops.

Chief executive Paul Webster said he did not want to head the revamped division.

Although film production will continue with a much reduced budget of £10 million, FilmFour will be reabsorbed into Channel 4 after being launched as a separate subsidiary four years ago.

At the time there had been hopes that the company - which had been behind a string of international hits like The Crying Game and Four Weddings And A Funeral - could compete with major Hollywood studios.

Recent efforts such as Charlotte Gray have enjoyed lukewarm success and FilmFour's last big hit was another modestly-produced movie, East Is East, in 1999.

FilmFour Ltd employs 59 staff at its London headquarters.