Grade said: "Simon commands a great deal of respect in the industry and people know he has my complete backing."
Shaps was appointed in late 2005 following a shake-up of ITV's management team by the then chief executive, Charles Allen. ITV has been dogged by criticism of its programming since his arrival.
ITV's top boss said it was important to give Shaps time to make his mark, in light of the long lead-through time in television production -- typically, television programmes take 18 months to reach screens from the commissioning stage.
Rumours that Grade was considering axing Shaps were also fuelled by the exit of marketing director, Clare Salmon, and commercial director, Ian McCulloch; though ITV has insisted both departures were amicable.
ITV1's share of commercial impacts are down only 6.2% in the first 17 weeks of 2007, after a 10% decline in the same period last year.
Grade said this was evidence Shaps was having an impact: "We're beginning to feel it. But the lead time is so long, give him a chance. Hopefully by the end of 2008 you will be able to see the effect."
He praised Shaps for standing by 'Harry Hill's TV Burp' and 'Al Murray's Happy Hour', where ratings were improving, despite a slow start.
Separately, Grade refused to comment on reports linking Dawn Airey, the former managing director of channels at BSkyB, with a newly created position overseeing production.
He said: "I have no doubt that the long-term future of this company stems from its ability to produce and own content."
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