Radio New Zealand would not have had the money to lure John Campbell even if it had wanted to.

It is understood that preliminary approaches to Campbell ended several weeks ago.

According to a broadcasting source, In recent weeks RNZ had taken the view that Campbell would be staying at MediaWorks.

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The source said there had been no discussions between RNZ and Campbell in recent weeks.

Campbell is not like Paul Henry, Mike Hosking or Paul Holmes and has not demanded mega-salaries from Mediaworks.

There is no vacancy now, but hiring him would be a substantial hit for the state broadcaster.

The Government has rejected a request from the Radio New Zealand board for funding increase.

RNZ promoted a plan to expand its reach with new ventures such as its online arm.

John Campbell will leave Campbell Live, with a new current affairs show continuing in his time slot four days a week, with two presenters. Campbell has rejected the chance to co-host a revamped version of his television show and quit MediaWorks, the company says.

The proposal included a funding increase that received the backing of Treasury but the Government rejected the request and with yesterday's Budget, RNZ said it had entered the seventh year of a funding freeze.

"What that means is that we will go ahead with improvements but we will have to do that within out existing budgets," said RNZ chairman Richard Griffin.

The RNZ budget for the next financial year will be decided in the next month, and despite early hopes RNZ has been aware for some time that a budget funding boost was unlikely.

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Griffin and chief executive Paul Thompson have been key players behind attempts to break the freeze and make changes.

Griffin that it would be politically difficult to give extra funding to broadcasting while other areas were given cuts.

He said that there would be no cuts to programmes as a result of the new RNZ budgets.

Griffin did not comment, but it is understood that the continuing freeze will means that RNZ will adopt more revenue raising at the periphery of its radio operations.

He insisted there were no plans to make cuts to RNZ programmes such as those at National Radio.