MPs call for watchdog inquiry into Murdoch's stake in ITV

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A group of MPs is to call on the Government and regulators to investigate the stake taken by Rupert Murdoch's BSkyB in ITV.

An Early Day Motion, tabled last night, will appear in today's order of business in Parliament, saying that "a prima facie case exists for the Secretary of State to subsequently intervene and instruct Ofcom [the media regulator] to undertake a public interest inquiry".

Organised by the Labour MP John Grogan, the motion has the backing of 39 Labour and Liberal Democrat MPs so far, including two former ministers, Elliot Morley and Don Touhig. Others who have signed up include Chris Mullin, Ian Gibson, Jon Cruddas, Jim Sheridan and Paul Flynn. Once the motion appears today, more MPs can add their names to it.

The news shows that serious political support has been added to the industry outcry over Mr Murdoch's sudden £1bn investment in ITV this month. Sky took a 17.9 per cent stake just after its arch-rival, cable group NTL, made a takeover bid for ITV. Sir Richard Branson, NTL's biggest shareholder, has already described the Sky move as a "threat to democracy".

Mr Grogan was part of the committee of parliamentarians, led by Lord Puttnam, who scrutinised the Communications Act 2003 - the legislation that lies at the heart of whether Sky's shareholding in ITV can be deemed to be against the public interest. He said: "The Murdoch raid [on ITV shares] reminded us where the real threat to plurality lies in the UK."

Mr Grogan said that, while the Puttnam committee was examining the Communications Act, "it was a constant battle with Downing Street to make the system less weighted towards Murdoch".

At the committee's insistence, a clause was inserted into the Act, allowing ministers to block media takeovers on "public interest" grounds. The Act also stipulated that major newspaper owners - such as Mr Murdoch - could not buy ITV but it did allow them to take a 20 per cent stake. Mr Grogan said that, in hindsight, the 20 per cent allowance was "too high".

The parliamentary motion says that the Sky stake in ITV could have far- reaching consequences for UK media. It says that the MPs are concerned that it may give Sky "the inside track" on the contract to provide news to ITV, which comes up for renewal in 2008 - Sky has long sought to oust ITN as the supplier of news programmes to ITV.

The MPs also say that the move makes the "future of Freeview uncertain and the prospects for a PSB [public service broadcasting] led FreeSat service less likely". The BBC and ITV have been in talks to launch a free satellite service, which would threaten Sky's paid-for satellite offering.

The motion says: "These developments underline the importance of strong independent public service broadcasters producing British programming to balance predominantly American and sports programming of Sky."