Robin Cook, the shadow Trade and Industry Secretary, wrote to Sir Bryan Carsberg, Director-General of the OFT, demanding an inquiry into 'predatory pricing' and warning other papers could be forced out of the market by News International's cross-subsidy of the Times' new 20p cover price.
Mr Cook, whose move drew a measure of support from Conservative backbenchers said: 'This price-cutting war is an ugly battle for domination between media barons, and it is readers who are likely to be the long-term casualties from the fall-out.
'It is unacceptable that a loss- making newspaper like the Times can cut its cover price by 55 per cent in less than a year, by relying on being subsidised by the profits from other parts of its owner's empire. This is predatory pricing, with the intention of forcing rivals, who are not able to bear such losses, out of the market.
'The consequence of this behaviour will be to reduce consumer choice and undermine competition. He (Rupert Murdoch, the head of News International) is a media baron who operates in a large number of countries, in many of these countries, this behaviour would have been stopped immediately.'
Peter Bottomley, Conservative MP for Eltham, said: 'There is a good argument for an inquiry. Those groups which can have their losses supported by other interests look as if they're abusing competition rules.' Sir Geoffrey Johnson Smith, vice-chairman of the 1922 committee of Conservative backbenchers, said last night that the issue raised 'some questions - investigation is a thing we should look at, though I am not defintely committing myself until I have talked to colleagues'.
Sir Anthony Grant, a senior member of the Commons Trade and Industry Select Committee, said: 'If we were to be left with the Times as the only broadsheet that would be a bad day for a free press.' But he made it clear he was not calling for an inquiry.
The Telegraph group has been forced to convene a meeting on Tuesday of its full board to give non-executive directors an opportunity to question the chairman, Conrad Black, about the circumstances surrounding this week's decision to slash the Daily Telegraph's cover price to 30p.
Yesterday the Telegraph's share price slipped still further, dropping 17p to 332p. At one point it fell below the 325p at which the shares were originally offered for sale when the company was floated in 1992. Before Thursday's announcement they stood at 540p.
The directors will want a full explanation of the events surrounding the price-cut decision and the Stock Exchange investigation into a pounds 73m sale of Telegraph shares by Hollinger, Mr Black's Canadian holding company, shortly beforehand.
The meeting will go ahead despite yesterday's statement from the Stock Exchange clearing Hollinger of any blame in selling of shares on 19 May, shortly before the cover price decision which prompted a dramatic collapse in the share price.
The stock market value of other newspaper groups was also affected by continuing fears about the damage likely to be done to profits by the war in the quality broadsheet market, though none suffered as much as the Telegraph.Reuse content