UK Culture secretary Jeremy Hunt has been accused of sitting on a report from media watchdog Ofcom which recommended that News Corporation's takeover bid for broadcaster BSkyB should be referred to the Competition Commission.
The BBC reported yesterday that the watchdog's findings, which were delivered to the Government on 31st December, called for an inquiry into whether the £7.5bn deal would restrict choice for British consumers.
International media conglomerate News Corp, which owns UK newspapers The Times, the Sunday Times, News of the World and The Sun, is owned by Australian-born media tycoon Rupert Murdoch. News Corp already has a 39 per cent stake in BskyB, and is now seeking to buy out the remainder.
The rival Daily Telegraph and Daily Mail newspaper groups, both of which back the UK's governing Conservative party, last year formed an unlikely alliance with the left-wing Guardian and a number of other media organisations including the BBC, BT and Channel 4, to petition business secretary Vince Cable to block the deal.
The group said the proposed BskyB takeover would have "serious and far-reaching consequences for media plurality". Their complaint was backed by a memo prepared by City law firm Slaughter & May, which set out a legal case for the minister to intervene.
Cable, the man who would have made a decision on the deal, was stripped of the responsibility by Prime Minister David Cameron, after undercover journalists from the Daily Telegraph recorded him boasting that he had "declared war" on News Corporation's owner, Rupert Murdoch.
The decision now rests with Jeremy Hunt - who, The Guardian reported earlier this week, has been in secret talks with News Corp since receiving the Ofcom report.
The whole affair is a political headache for the Government. Backing from the Murdoch-owned Sun, the UK's best-selling newspaper, has been credited with helping the Conservatives into government at the last election.
The party also enjoys close connections with the Murdoch empire. Former News of the World editor Andy Coulson, now David Cameron's director of communications, is close to a number of prominent figures in the organisation, including News International CEO and former Sun editor Rebekah Brooks (née Wade).
While Jeremy Hunt - who has previously said he does not oppose the takeover - has the discretion to ignore Ofcom's findings, given the massive publicity surrounding the deal he is unlikely to do so, according to BBC political editor, Robert Peston.
News Corp's takeover plans have already cleared another possible legal hurdle, after European Competition Commissoners offered no objection to the deal.
According to an ICM poll carried out in December, just 5 per cent of the British public supports the proposed takeover, with 44 per cent against.