Richard Desmond set to snap up Five - and he's pledging even more reality TV

It is understood the businessman, who earned much of his 950m fortune selling pornographic magazines such as Penthouse and Asian Babes, has briefed Ofcom, the media regulator, on his plans to revamp the channel with more reality programmes and chat shows.

The acquisition will transform the influence of Desmond, who is said to have beaten off rival bids from Time Warner, Channel 4 and Endemol, the producer behind Big Brother.

While Desmond is set to reshape Five's schedule with more reality shows, he is also expected to honour long-term programming contracts worth 600m that tie programmes such as the crime drama CSI to the channel.

The new owner is expected to maintain Five's public service licence requirements, which consist of providing regular news bulletins. Although handing back the licence would have given him more freedom with scheduling, it would have cost him Five's valuable slot high on Sky and Virgin Media's electronic programme guides.

He does, however, want to drive down costs at the station, which could spell a number of job cuts. Last year, Five made a 9.1m operating loss.

The station's owner RTL, the pan-European broadcaster, previously tried to increase its scale by merging with Channel 4, but that attempt failed.

Under cross-media rules, Desmond could use his publications to promote the channel in an attempt to drive its audience share up from 6 per cent, but using TV airtime to plug his newspapers and magazines would be more heavily restricted.

The media tycoon is said to want Dawn Airey, Five's chief executive, to stay on to run the station for him. It has also been reported that, if Desmond does succeed in taking over Five, he may purchase the licence for Big Brother, which Channel 4 has decided not to renew.

Desmond, who sold his adult magazines several years ago, is already active in television through Portland, home of the Television X and Red Hot TV channels.

There are those in the industry who believe Desmond could turn around the failing station. Charles Fletcher, of Caledonia Media, said he should not be underestimated.

"He is a sleeping giant," Mr Fletcher said. "People have underestimated him. He took the Express and turned it round to make it financially successful, although its glory days are behind it. Channel 5 is a forgotten station. It has been ignored by its German operator mother and, if he comes in, he has a clear focus of where he wants to take it."Big Brother is a well-known reality brand, but it's tired and so there are other reality programmes that could be more value to Channel 5."

Mr Fletcher added: "He saved jobs, built the strength of the Express financially, although I don't think editorially it has improved. People do underestimate him because they think he is just an 'Asian Babes' and 'Dirty Desmond' kind of guy, and that has been the mistake."

No-one at Desmond's company, Northern and Shell, was available for comment.

How naked women helped him get to the top

HE LEFT school at 14, an academic failure. But he went on to create Britain's leading independent publisher and amass a personal fortune of 950 million, much of it due to men's appetite for looking at naked women.

Richard Desmond started by selling classified adverts, owned two music shops by the age of 21 and set up Northern and Shell in 1974 with a publication called International Musician and Recording World.

In 1983, he bought the rights to publish the American magazine Penthouse in Britain and expanded into the far more lucrative market of top-shelf magazines such as Horny Housewives and Asian Babes.

A decade later, he launched OK! as a rival to Hello! magazine, which it has now surpassed.

In 2000, Northern and Shell bought Express Newspapers for 125m, after which Desmond became involved in a feud with Viscount Rothermere, publisher of the Daily Mail, whose personal life Desmond began documenting in the Express.

A Jewish philanthropist and keen drummer, he formed the RD Crusaders with Roger Daltrey to raise money for good causes.

He was reported to have impersonated Adolf Hitler and chastised the chief executive of the Daily Telegraph group in a German accent when they were considering selling the title to a German company.