"The crises in society, the family, morality, politics, security and the economy...
has come about because the prophets have been forgotten, the Almighty has been
forgotten and some leaders are estranged from God," Ahmadinejad says, according to a pre-released translation of his message.
Dorothy Byrne, Channel 4's head of news and current affairs, said Ahmadinejad's address was chosen because Iran's relations with the West would likely remain a significant global issue in 2009.
"As the leader of one of the most powerful states in the Middle East, President Ahmadinejad's views are enormously influential.
"As we approach a critical time in international relations, we are offering our viewers an insight into an alternative world view."
But the Board of Deputies of British Jews, which represents the Jewish community in the UK, said the broadcast was offensive.
"To invite him to deliver a Christmas message, even a so-called alternative one, fills me with disgust," Henry Grunwald, the group's president, said.
The Israeli ambassador to London, Ron Prosor, condemned the speech as a "bogus message of good will".
"That [Channel 4] should give an unchallenged platform to the president of a regime which denies the Holocaust, advocates the destruction of the sovereign state of Israel, funds and encourages terrorism, executes children and hangs gay people is a disgrace," he said.
Ahmadinejad, speaking in Farsi, blames society's problems on humanity's rejection of religion.
He predicts Christ will return "with one of the children of the revered Messenger of Islam and will lead the world to love, brotherhood and justice".
"Today, the general will of nations is calling for fundamental change," Ahmadinejad says.
"The prerequisite to this change is a change in goals, intentions and directions.
"If tyrannical goals are repackaged in an attractive and deceptive package and imposed on nations again, the people, awakened, will stand up against them."
For her part, Queen Elizabeth II urged people not to "lie down and accept defeat" but to draw strength from loved ones in her annual Christmas message to the Commonwealth.
The 82-year-old UK monarch also made an apparent reference to last month's attacks in India's financial hub Mumbai which left 163 people dead in the message, which she writes herself.
"Christmas is a time for celebration, but this year it is a more sombre occasion for many," she said.
"Some of those things which could once have been taken for granted suddenly seem less certain and naturally give rise to feelings of insecurity.
"People are touched by events which have their roots far across the world. Whether it is the global economy or violence in a distant land, the effects can be keenly felt at home."