Chris Smith, the Secretary of State for Culture, is expected to make the announcement to the House of Commons today that Test matches will be taken off the "A" list of events - the so-called Crown Jewels - alongside the Cup Final and Wimbledon, ending decades of their exclusive broadcast by the BBC.
In a bidding war for the rights to broadcast the matches live, Sky television would be almost certain to win against the BBC, which would be restricted to broadcasting highlights.
The announcement will be seen as a further expansion of the power of Mr Murdoch and increase concern about his close relationship with Tony Blair. It is believed Mr Smith wanted to reject the report of the Gordon committee which had recommended taking Test matches off the list but was overruled by Downing Street.
Sky already has the rights to broadcast overseas Test series and one- day matches and some domestic one-day internationals. It remains unclear whether Sky would want to bid for all of the matches. Test Match Special, on BBC Radio, is unaffected.
The decision will split cricket enthusiasts between those who resent paying satellite fees and those who would welcome a much-needed injection of capital into the sport.
Mr Smith will confirm that the FA Cup Final, the Wimbledon tennis finals, the Grand National and the Derby are among the national events that will remain on the restricted list, guaranteeing licence payers free viewing.
The Government will try to sweeten the pill by announcing that for the first time, the World Cup is to be included in the "A" list of restricted events which must be available to be shown on all channels. The list will also include for the first time the Silk Cut Challenge rugby cup finals.
Ministers rejected proposals by the Gordon Committee which reviewed the list of sporting events, to exclude the World Cup in the limited list. The committee included Michael Parkinson, Jack Charlton and Steve Cram, the former runner.
Ministers are braced for a backlash from the public at the further limitation of their viewing, after the expansion of BSkyB coverage into the football Premier League.
The Test and County Cricket Board has lobbied for the move because it will boost the income from Test matches. The money raised should eventually be earmarked for improving coaching and ground facilities.
The bidding for coverage of football's Premier League has led to millions of pounds being poured into England's top football league clubs, who have been able to attract stars from abroad. Cricket supporters are hoping that the same effect will be felt in the leading cricket clubs.
The Government is backing the changes because it is convinced they will prove to be popular with the viewers, but it was resisted by John Major, the former prime minister, and an ardent cricket supporter. A senior BBC source said last night: "This is bad news for the BBC and bad news for the cricket fan, who will now have to pay for what was previously free."
Brian Murgatroyd, spokesman for the England and Wales Cricket Board, said: "The board's position is quite clear. We'd like a free market because we could then sell the game. This would create more money. Cricket is not a wealthy sport. County cricket could do with a shot in the arm and money doesn't grow on trees."
Brian Downing, chairman of the England and Wales Cricket Board's Marketing Advisory Committee, said: "We would like the BBC to pay a market rate. We have never said we would rush to Sky. We are very mindful of getting to the most viewers. It doesn't mean that we'd desert the BBC. "This is very healthy from our point of view. It makes a lot more commercial sense."
Labour MPs have already protested at the threat to limit Test coverage to satellite stations. MPs such as Colin Pickthall, the Labour MP for West Lancashire, recently warned Mr Smith that he should champion the millions of cricket fans who wanted their coverage "free to air".
Blair and Murdoch, page 5