July 10, 2011 / 11:16 AM / 6 years ago

Pressure mounts on UK government to halt Murdoch/BSkyB deal

<p>The Sky News logo is seen on television screens in an electrical store in Edinburgh, March 3, 2011.David Moir</p>

LONDON (Reuters) - Prime Minister David Cameron came under growing pressure Sunday to halt Rupert Murdoch's bid for pay-TV operator BSkyB, at least until an investigation into phone-hacking at the media magnate's newspapers has been completed.

Opposition leader Ed Miliband said he would force the issue to a parliamentary vote this week if Cameron failed to act.

"He needs to make clear that BSkyB cannot go ahead until the investigation is complete," Miliband told the BBC's Andrew Marr program.

"I hope he changes his position on this. I don't want to have to force a vote."

Pressure came too from members of the government's junior coalition partner, the Liberal Democrats, who have traditionally had a less cozy relationship with Murdoch.

Deputy LibDem leader Simon Hughes said he would be prepared to back Labour's call for the deal to be postponed and urged other LibDems to do the same -- setting the stage for a major test of the coalition's unity.

LibDem Energy Secretary Chris Huhne said the government needed a personal assurance from Murdoch that no title other than the News of the World had undertaken any illegal activity, and indicated he too may be prepared to vote with the opposition.

"We'll obviously have to look at the details of the motion before deciding what should be done in terms of voting," he told the BBC.

Murdoch's News Corp (NWSA.O), the world's largest news conglomerate, has made a $14-billion bid for the 61 percent of the profitable pay-TV operator BSkyB BSY.L that it does not already own.

Shares in BSkyB shed more than 7 percent Friday on growing doubts over whether the deal would go through.

LEGAL WRANGLING

Murdoch flew into London Sunday to try to save the deal after a phone-hacking scandal forced him to close the News of the World, the first British paper he bought in 1969.

Cameron has ordered a judge-led enquiry into the phone-hacking allegations but has so far resisted calls to end Murdoch's attempt to buy out BSkyB.

Transport Secretary Philip Hammond said he understood public concern over an expansion of Murdoch's empire but the government had to operate within the law.

"The government can't just change the rules in mid-stream. If we did we'd undoubtedly be taken to court and we'd probably lose," he told Sky News.

But Alex Carlile, a respected lawyer and senior LibDem figure, said the government could not ignore the result of a parliamentary vote, and he expected a significant number of LibDems to support Labour's motion, and a substantial number of Conservatives to abstain.

"The politics are that it would be wholly unacceptable for News Corp to take over BSkyB and I believe that the application of the law will achieve that end," he told Sky News.

Carlile said the shocking allegations of corruption and cover-up at News of the World meant it was "perfectly reasonable" for Jeremy Hunt -- the culture secretary who has the final say on whether News Corp should buy out BSkyB -- to alter his requirements from News Corp.

"In my view, the law requires that Mr Hunt should go back and require further undertakings, if they can be obtained."

Before the phone-hacking scandal escalated a week ago, those looking at whether Murdoch should get the go-ahead focused on whether it would give him too much power over Britain's media. News Corp also owns two dailies and one other Sunday paper.

The phone-hacking allegations have prompted Britain's media regulator Ofcom to say it will consider whether News Corp directors are "fit and proper" persons to run BSkyB. But the regulator can hardly rule News Corp is fit to run some UK news operations but not others, so any such ruling might in effect shut down Murdoch's entire UK empire.

Reporting by Christina Fincher; Editing by Jon Hemming

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