Murdoch lashes out at 'Burma-like' regulators

James Murdoch, the chief executive of the satellite television company BSkyB, launched a withering attack on the UK's "authoritarian" broadcasting regulation yesterday and accused the BBC of "megalomania".

His comments came as regulators prepare to review Sky's £940m acquisition of a near-18 per cent stake in ITV. The purchase has raised concerns over the influence the pay-TV giant could wield over the free-to-air broadcaster's operations.

Mr Murdoch was speaking at an event organised by the telecoms and media regulator Ofcom. He said: "Arguing in favour of the free market still causes raised eyebrows in the cosy world of UK broadcasting. Too many people in broadcasting have been brought up in the straitjacket of a heavily regulated and interventionist structure."

Mr Murdoch said that in a rapidly shifting media landscape, regulators should not second-guess the market. "In an era of constant change, a good umpire sets the rules and watches the game flow unless those rules are flouted. A bad one gets in the way," Mr Murdoch said.

He pointed to the emergence of new media companies such as MySpace and YouTube that have generated "an unstoppable torrent" of unregulated, user-generated, content appearing online. "This reality of consumers' power today has not really been reflected in broadcasting regulation," he said.

He also took a swipe at the BBC for "fantasising about creating a 'British Google'" to be funded by the taxpayer. "This is not public service, it's megalomania. Delusions of grandeur will flourish in the absence of proper accountability," he said.

Mr Murdoch attributed the "authoritarian" approach to "the dead hand of history" dating back to the establishment of the BBC in the 1920s. He argued that the top-down approach to regulation was designed to ensure that broadcasting was "a sort of moral and educative crusade".

"That is an attitude more at home in Rangoon than in modern Europe," he added.

Andy Duncan, head of Channel 4, said: "The industry has a great history of intervention via public service broadcasters. There is more money spent per head on original content than any other country in the world, and the vast bulk of the original programming comes from the BBC, ITV and Channel 4."

Sky's stakebuilding in ITV has blocked the cable operator NTL from buying the broadcaster, leading to claims that Sky is already exercising a "material influence" on the company. But Mr Murdoch maintained that he played no part in the appointment of Michael Grade to run the broadcaster, and has yet to meet the former BBC chairman.

Steve Burch, NTL chief executive, called on Ofcom to instigate an "overall review so that the playing field truly does get levelled".