The case involves the judicial review of a decision by the Radio Authority to sanction a scheme by which the publisher, Emap, hopes to get round radio ownership restrictions.
Emap, which owns three radio licences, is bidding for Trans World Communications, which owns five. If successful, it would end up with eight, two more than permitted by the 1990 Broadcasting Act.
Schroders, its merchant bank, has devised a scheme under which two licences will be placed in a deadlocked company jointly owned by Emap and Schroders. As neither would own a majority of the equity, the argument is that neither would control the licences for the purposes of the Act.
The scheme has the sanction of the Radio Authority, but its approval is being challenged in court by another TWC shareholder, Guardian Media.
If the court upholds the Radio Authority's decision a flood of similar schemes is likely to follow, heightening the rapid rationalisation in the sector sparked by the growing profitability of local radio.
The highly convoluted radio rules are acknowledged to be ripe for reform. The Government is currently reviewing the radio ownership regulations as part of its review of cross-media ownership and the six-licence rule is widely tipped for abolition.
However, in the run-up to liberalisation many media groups have been testing the limits of the rules in an effort to establish secure holds on key stations before any change in the law.
Guardian Media, which because of its ownership link to the Guardian newspaper cannot increase its stake in TWC, is widely tipped to want to extend its radio investments.
Recently, the group that owns the Daily Mail effectively upped its stake in the radio group, Chiltern, to more than 20 per cent by means of a jointly owned company. This lead Chiltern to ask for the Radio Authority's ruling on the legitimacy of the holding.
If the High Court upholds the ruling on Emap, it could have important ramifications for the television sector as well.
The television ownership rules also derive from the 1990 Broadcasting Act, and pressure for consolidation is as fierce.
Several merchant banks are thought to be planning similar schemes challenging television ownership limitations if Emap gets the go-ahead.