The next few days may determine whether Mr Murdoch, who is believed to have offered pounds 1.75bn for a controlling interest in the three Italian TV channels owned by Fininvest, can beat off a challenge from Prince al-Waleed, the Saudi investor who helped to bail out the Euro Disney theme park near Paris.
According to an insider at News Corporation, Mr Berlusconi is "holding back from completing a deal" in an effort to retain management control of the three stations.
He is thought to be simultaneously negotiating with Mr Murdoch's team and representatives from the prince's consortium, which includes the German entertainment group Kirch. Both bidders are well-heeled. The Saudi- led group has the added muscle of Time Warner, the entertainment giant that owns magazines, a film studio, cable operations and a record label.
But Mr Murdoch is also a force to be reckoned with. Earlier this year he signed a deal with MCI, the second-largest US long-distance telephone carrier, worth $2bn to News Corporation. The company also has at least $1bn in cash on hand.
When his interest was revealed last month, News Corporation sources said that Mr Murdoch viewed the possible purchase as "opportunistic" and hoped to get the highly popular TV channels at a low price in view of Mr Berlusconi's political and regulatory problems.
Mr Berlusconi, for his part, has been provided with some breathing room, and is expected to drive a hard bargain.
He "won" a controversial referendum last month, allowing him to retain control of his media empire.Reuse content