BSkyB chair James Murdoch backed by investor Odey

News Corp Chief Executive and Chairman Rupert Murdoch appears before a parliamentary committee on phone hacking at Portcullis House in London July 19, 2011.

LONDON (Reuters) - A leading investor in BSkyB said he backs James Murdoch staying as chairman of the pay-TV firm despite politicians questioning his suitability, the Telegraph newspaper web site reported on Saturday.

Crispin Odey, head of hedge fund Odey Asset Management, which holds around 2.7 percent of BSkyB's shares, told the Sunday Telegraph in an interview that he admired the 38-year-old son of News Corp head Rupert Murdoch as a strategist.

But he said News Corp should reduce the number of its appointees to the BSkyB board.

News Corp, which holds 39 percent of BSkyB, abandoned its $12 billion bid to buy the remaining shares this month in a furor over allegations of phone hacking by its News of the World tabloid.

"James is a great strategist and should remain chairman, but at the moment BSkyB has got too many News Corp appointees. They need to take one of the News Corp appointees off," Odey told the Telegraph.

The issue of whether James Murdoch should remain as chairman is likely to dominate the firm's financial results next week.

James was deemed to have given a good performance when he appeared before a high-profile British parliamentary committee this week to answer questions on the hacking scandal.

Odey's firm increased its stake in BSkyB earlier this month by buying an extra 3 million shares.

(Reporting by Tim Castle)