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MindShare and Carat will now battle it out for the brief, which covers Sky, Sky Plus and Sky Bet, and pitches are due to be held next week.

MediaCom, shortlisted by Sky for the pitch, would not confirm its intention to participate in the review.

Although the pitches have yet to be held, insiders are already tipping MindShare to win the account. Sky is already aligned to WPP with HHCL/Red Cell holding all of the Sky creative account except for Sky Bet, which is held by Mother.

The chief executives of the two companies are also acquainted. Kelly Clark, the chief executive of MindShare, knows the chief executive of Sky, James Murdoch, from their time working in Asia. Clark is the former chief executive of MindShare Asia-Pacific while Murdoch ran Star TV in the region.

Universal McCann has held the account for seven years. Damian Blackden, the joint managing director of Universal McCann, confirmed the agency would not be repitching but refused to say why.

Charlie Ponsonby, the Sky marketing director, and Jon Florsheim, the managing director of sales, marketing and interactive, are overseeing the review.

Sky now reaches more than seven million subscribers but the recruitment of new subscribers has slowed. The company attracted just 66,000 new customers in the first quarter of 2004. This was below City expectations and was the second-lowest recruitment level since the launch of Sky Digital in October 1998.

However, its average revenue per user continues to grow following a recent hike in subscription rates.