Government backs down over media ownership safeguards

The Government beat a tactical retreat yesterday by accepting new safeguards against takeovers of British television stations by newspaper groups and foreign companies.

In an attempt to prevent a defeat in the House of Lords, ministers proposed a "plurality test" before newspaper groups, such as Rupert Murdoch's News Corporation, are allowed to expand into terrestrial television and foreign media companies to buy ITV licences.

Tessa Jowell, the Secretary of State for Culture, Media and Sport, has reached a compromise with Lord Puttnam, the Labour peer and film producer, who has been pressing for bigger hurdles to be included in the Communications Bill, which relaxes the cross-media ownership rules and would allow Mr Murdoch to buy Channel 5.

Lord Puttnam withdrew an amendment calling for tougher rules, on which the Government faced defeat yesterday. Instead, Ms Jowell will table amendments saying the new test will be devised by Ofcom, the communications regulator, which could block takeovers in the public interest.

The Tories accused ministers of retreating from pledges to liberalise the broadcasting industry. John Whittingdale, the shadow Culture Secretary, accused the Government of a "humiliating surrender". He said: "It runs ... contrary to the declared intention of the Communications Bill to deregulate."

Lord Puttnam said yesterday he believed the Bill would prevent Mr Murdoch from buying Channel 5 and would prevent the sort of "exploitation" seen in Italy, where the Prime Minister, Silvio Berlusconi, enjoys a near-monopoly on media outlets.