Today, the CC denied permission for the planned VoD venture to launch on the grounds that it would be anti-competitive.
Grade said that ITV was "surprised" by the decision as it believed Kangaroo, "competing in a crowded online world against dominant global brands", was an attractive consumer proposition.
However, he insisted that "the success" of ITV.com has proved that ITV's UK content is attractive enough to stand on its own and "we remain focussed on our online growth".
He added that the broadcaster will provide an update on its online plans on 4 March.
Kangaroo was to play a big part in ITV’s plans to expand its online presence. The broadcaster is hoping to grow its annual online revenues to £150m by the end of 2012.
Meanwhile, in a joint statement, Kangaroo's backers, BBC Worldwide, ITV and Channel 4, said: "We are disappointed by the decision to prohibit this joint venture. While this is an unwelcome finding for the shareholders, the real losers from this decision are British consumers.
"This is a disproportionate remedy and a missed opportunity in the further development of British broadcasting."