Discovery, the US media giant behind the TLC and Eurosport channels, has issued an extraordinary public threat to withdraw all its programming from Sky over claims it "refuses to pay a fair price".

The company, which has spent £1bn acquire pan-European rights to the Olympics, said its channels will be switched off on Sky at the end of the month if a deal is not reached.

Discovery's decision to make a public blackout threat comes after months of fraught negotiation that the company said had reached an impasse.

Susanna Dinnage, Discovery's managing director in the UK said: "We believe Sky is using what we consider to be its dominant market position to further its own commercial interest over those of viewers and independent broadcasters. The vitality of independent broadcasters like Discovery and plurality in TV is under threat.”

Pay-TV operators across Europe have in recent years focused spending on exclusive, on-demand drama and sports rights they believe motivate households to subscribe. The trend has squeezed budgets for the type of factual programming provided by Discovery, which Sky claims has suffered a 17pc decline in its share of viewing since 2013.

A Discovery source said: "This is about consumer choice. If people just want drama they can get a Netflix subscription."