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Lygo's coming home - and not a moment too soon for Channel 4. Kevin Lygo first joined Channel 4 back in 1997 as the head of entertainment and music and was responsible for a renaissance of creativity at the channel, especially in terms of home-grown comedy. His babies include So Graham Norton, Trigger Happy TV, Smack the Pony, Spaced, Black Books, the Ali G Show - not forgetting one of the bravest programmes in recent TV history, the Chris Morris Brass Eye satire on the media hysteria about paedophilia.

So many were mystified two years ago when Lygo upped sticks and went to five, an outfit whose ambitions then extended to little more than the "films, fucking and football" mantra devised by its then chief executive, Dawn Airey.

But even here, Lygo managed to work some magic, daring to slot arts programming into primetime as well as pulling off kitsch coups such as signing Terry Wogan and Carol Smillie. It was obvious, though, from the moment that Tim Gardam announced he was leaving his post as Channel 4's director of television, that Lygo would be his successor.

No-one wants to do Gardam down (he's leaving for personal reasons) but it's undeniable that during his tenure the station has lost some of its much-vaunted edgy innovation. Consequently, there's been an ever greater reliance on the station's biggest property, Big Brother, which in recent years has delivered a surge in summer ratings. Trouble is, this summer Big Bro has been a very Big Bore indeed. Channel 4 is hardly a channel in crisis - it still achieves its expected peaktime share of around 10 per cent, give or take - but Lygo is surely needed more than ever, isn't he?

Andy Barnes, the sales director of Channel 4, admits that the channel may have been outspun recently by five but he argues that criticism of Big Brother's performance is largely unjustified. He states: "It's important we put this in perspective. Is it (Big Brother series four) bigger than series three? No. But is it bigger than series one? Yes. Is it bigger that series two? Yes. It is fantastically successful. It is delivering between 4.5 and 5.5 million audiences every weekday. And look also at the figures for Location Location Location, Time Team and Teachers. I don't think there's any cause for complaint there."

Many sources at Channel 4 are more than a little bit miffed that five has been taking all the plaudits for, as one executive put it, "rescheduling a couple of things post-watershed". But after all, television is a fickle business and even senior Channel 4 managers admit that they have not been marketing their achievements sufficiently astutely.

For that very reason, it must be doubly satisfying that Lygo - the ultimate author of Channel 4's recent public relations setbacks - is returning. "Obviously it's fantastic news," Barnes says. "He's a lively, ebullient, upbeat character. He has a fantastic track record in entertainment."

The Channel 4 brand will be back on track if Lygo again starts delivering that most unusual of beasts - the cult show that's actually popular. But no-one should expect overnight miracles. Some critics also believe that Channel 4's problems are more deep-rooted than anyone has admitted so far. In the absence of consistent delivery in either drama or comedy, and given the dominance of Big Brother, the channel has become addicted to the sorts of lame reality shows that few other networks would touch these days.

And some observers also argue that, although Big Brother's audiences are hardly disastrous, the long-term signs are ominous. It has, they say, pretty much hit the buffers. Getting a bunch of very stupid people drunk in the hope that they will shag in front of the cameras does not a programme idea make. Even the presenter, Davina McCall, is clearly bored rigid by the spectacular fecklessness of the housemates they've rounded up this year.

That's a bit harsh, Chris Hayward, the head of TV at ZenithOptimedia, responds: "Channel 4 has to be a little disappointed about its efforts of late but Big Brother certainly isn't the disaster that some people have been saying. It's still an important part of the schedule in terms of audience delivery. It's just got the chemistry wrong in terms of the people in there (the Big Brother house). Channel 4 is desperately keen to keep up its reputation for edginess and innovation but the risk in pursuing that goal is that you almost inevitably do things that don't quite work now and again."

Hayward points out, though, that as well as depending on Big Brother, Channel 4 also relies on Graham Norton delivering five nights a week.

Whatever you think about Norton's show, it's better than anything else that channel has managed to devise for that slot. So, overall, Hayward adds, the station needs more consistency. "Teachers has been outstanding but it needs something else in drama and it needs new comedy. It's great that Channel 4 has been moving away from all the US shows and has been attempting to develop more home-grown stuff but, again, that means it will have the odd failure. Lygo won't change things overnight but he is good at generating interest. Look at what he's done at five, taking material that wasn't great but scheduling, packaging and marketing it well," he states.

Nick Theakstone, the director of investment at MindShare, thinks Channel 4 should be more willing to hold its hands up and admit it has been underperforming - that sort of openness should be part of its brand, too. He comments: "Lygo is a massive loss to five as well as a big gain for Channel 4. I don't know where the balance sits in that equation but I do believe Channel 4 has been through a rough patch, no matter what it says. Its big issue in recent times has been rediscovering clarity about where it is as a business. It has dropped the bits that were losing money (some of the 4Ventures businesses) and wants to concentrate on what it is good at - making programmes - but it still hasn't delivered. With the broadcast world becoming ever more competitive, Channel 4 has to create really interesting TV. The truth is that it has not been fighting as hard as it could have been."

And what of clients? Many in the youth and entertainment sectors value highly the sort of demographic Channel 4 has delivered in recent years.

But Andrew Constable, the head of media services at Coors Brewers, says he's actually more worried about five and what it has lost than what Channel 4 has gained. "Comparatively, Channel 4 is a big ship with far greater resources and to me this appointment is more about maintaining the philosophy of the station and continuing its vision. I find it difficult to believe that it will change hugely. But with five you have to be far cleverer to make it work," he concludes.