The reports were fuelled by recent comments by Gerry Murphy, chief executive of Carlton, which owns the terrestrial digital service with Granada, that it was considering inviting a third investor to help with the costs. At the time, the talks were linked with BT and BSkyB
This was compounded by the fact that NTL chief executive Barclay Knapp was seen going to meet ITV Digital's chief Stuart Prebble last week.
Carlton and Granada's share prices have nose-dived recently amid shareholder discontent about the digital broadcaster's failure to perform. The two ITV companies are forecast to have invested £1.1bn by the time the service is slated to break even in 2003 with 1.7m subscribers.
ITV Digital currently has 1m subscribers, compared with the 5m boasted by rival Sky Digital, the News Corp-backed satellite broadcaster which launched its digital service at the same time.
The attractions of such a deal for NTL, however, are clear. It would like to be able offer its partial service to a national audience, but it is currently hampered by both lack of cable network in some parts of the country, especially remote areas, and cable franchises owned by rival Telewest. This leaves it with a major hole in its penetration of the UK market.
If NTL did strike a deal with ITV Digital, its offering could be transmitted across the country because ITV Digital claims to be available to anyone with a TV aerial.
Last week NTL agreed to carry ITV Digital's new football-heavy sports channel ITV Sport. The service has been set up to challenge Sky's dominance in the pay-TV sports market.
Granada's share price fell almost 1% to 144.75p, while Carlton's fell 1.3% to 313.75p in this morning's trading.