Culture Secretary delays BSkyB takeover decision

Jeremy Hunt has delayed his decision on whether New Corporation's planned takeover of BSkyB should be subject to a full competition inquiry to allow them more time to allay concerns over media plurality.

The culture secretary admitted today that he was tempted to refer the bid to the Competition Commission following recommendations from media regulator Ofcom, acknowledging that the move may be against the public interest.

But he added that he would be prepared to consider "undertakings in lieu" from Rupert Murdoch's News Corp, with some suggestions that concessions may be made to allow the bid to go through.

Media reports have suggested that News Corp has signalled it would be willing to make changes to its bid to avoid a protracted inquiry, potentially separating Sky news from BSkyB.

A report by media watchdog Ofcom recommended that the proposed deal should be investigated further by the commission.

Mr Hunt said he would ask Ofcom whether any proposed changes to the bid by News Corp address concerns over plurality, requesting that the Office of Fair Trading is involved in the process.

"My main concern is not to work to an arbitrary timetable but to ensure that I reach my decision in a fair and even-handed way which is transparent and ensures that all concerns are properly considered," Mr Hunt said.

If the undertakings are accepted, a 15-day consultation period will commence, when parties will be able to express their views.

News Corp, which also owns newspapers including The Sun and The Times, has made an 8 billion approach in June to buy the 61 per cent of BSkyB it does not already own.

There has been significant opposition to the takeover by other media groups, with companies behind the Daily Telegraph, Guardian, Daily Mail and Daily Mirror all expressing fears over the effect of the move on competition. They have been joined by bosses at Channel 4 and the BBC.

But News Corp has said it believes Ofcom's analysis to be lacking, saying the level of plurality in the UK has increased since 2003, when the Communications Act was enacted.

The media group said: "While Ofcom acknowledges that the combination of News Corporation and BSkyB would have a minimal impact on consumers and would not enhance News Corporation's ability to influence the news agenda, it nevertheless concludes that the transaction may be expected to operate against the public interest.

"News Corporation has made a submission to the Department of Culture, Media and Sport setting out a number of issues with the Ofcom report. However, in the interests of progressing to a transaction, News Corporation has submitted an undertaking that we believe addresses Ofcom's concerns.

"We will continue to engage constructively with the regulatory process."

An Ofcom spokesman said: "News Corporation alleges that Ofcom did not have an open mind when considering the issue of plurality referred to it by the Secretary of State. This allegation is without foundation."

Ofcom's report, which was submitted on December 31 but made public for the first time today, also said there was specticism from stakeholders about the effectiveness of behavioural remedies as a means of guaranteeing the editorial independence of Sky News from News Corp.

It called for a wide-ranging review of the industry in relation to media plurality.

News Corp's move to take full control of BSkyB began in June when the company unveiled an offer valuing the business at around 12 billion.

In November, Business Secretary Vince Cable ordered Ofcom to carry out a media plurality test on the deal. Authority for dealing with the case was handed to Mr Hunt in December after comments to undercover reporters by Mr Cable.