Not sure about ITV, but BBC1 certainly cuts into programmes to announce breaking news. The most recent, I was watching 'Aunties Bloomers' on BBC1, then suddenly they went to a static BBC1 logo and a voice-over "This is BBC1. We interrupt this programme for an important announcement". Then the news came on about the Queen Mother's death.
When Diana died, many of the satellite channels kept on with their normal programming (I was watching TCC), but kept putting a message on during the ad breaks "Please turn to BBC News for an important announcement from Buckingham Palace".
I also heard that on Sept 11, someone was watching ITV, and suddenly it cut to the ITN newsdesk (without any announcement) for coverage of the attacks in New York.
All of the channels cut into broadcasting in the event of major news. For events of national/international significance then obviously broadcasters will opt out. However, ITV *REGIONS* in themselves don't often opt out of network programming to cover breaking news in their area.
The strap across the bottom of almost all satellite channels was actually "Turn to Sky News".
I didn't actually know about the LNN special but it's still not really the same, is it? I mean, the accident was being reported at around 1-ish, wasn't it? The ITV regional stations just seem incapable of covering much "as-it-happens," not that wall to wall coverage is particularly beneficial, however.