Jeremy Hunt ruling will be open to legal challenge after past Murdoch support

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Jeremy Hunt, the Culture Secretary, could face a legal challenge if he approves Rupert Murdoch's controversial takeover of BSkyB, because of his past comments in support of the media mogul, lawyers and opposition politicians warned last night.

David Cameron's decision to hand responsibility for ruling on BSkyB's future from Vince Cable to Mr Hunt caused surprise and anger at Westminster. The Liberal Democrat Business Secretary was stripped of the power after being caught on tape boasting he had "declared war" on Mr Murdoch's News Corporation.

But critics claim that Mr Hunt is equally compromised – specifically by his remarks lauding Mr Murdoch for his contribution to British television and apparently backing Mr Murdoch's planned takeover.

Mr Hunt said six months ago: "It does seem to me that News Corp control Sky already, so it isn't clear that, in terms of media plurality, there is a substantive change, but I don't want to second-guess what regulators might decide." His critics say that he has already done exactly that.

It also emerged that Mr Hunt held a private meeting with the tycoon's son, James, the chief executive of News Corp in Europe and Asia, shortly after the takeover bid was launched in June. Meanwhile, BSkyB shares rose 2 per cent yesterday, up 14.5p to 743p, as investors judged that the chances of News Corp's takeover going ahead had soared with Mr Hunt's appointment.

Andrew Neil, the former Sunday Times editor, said News Corp had pulled a "very expensive ad campaign" to lobby support for its bid to acquire the 61 per cent of BSkyB shares that it does not own. He told Sky News it had been shelved because Mr Murdoch was now confident the deal would be waved through. Sir Gus O'Donnell, the Cabinet Secretary, disclosed last night that he had consulted government lawyers over Mr Hunt's past comments – and said that he was satisfied that Mr Hunt had not compromised his impartiality.

But Stephen Critchley, a corporate law expert with the City law firm Teacher Stern, said that Mr Hunt's remarks over the acquisition are potential grounds for a legal challenge. He said: "This does make it arguable he has prejudged the issue, increasing the chance that an interested party may challenge the decision by way of judicial review."

A specialist in competition law said: "It is arguable that there would be grounds for a judicial challenge. You would have to do more than argue the minister was biased. You would have to show that it wasn't a rational decision."

Ivan Lewis, the shadow Culture Secretary, said there would be a "serious risk of a judicial review" into any decision by Mr Hunt to approve the deal. He said: "Jeremy Hunt's previous statements raise serious questions about his capacity to be objective."

A senior Liberal Democrat source argued: "Jeremy Hunt could be more vulnerable to an action for judicial review than Vince Cable. Hunt has given specific views on the specific proposition of the takeover."

Ed Miliband, the Labour leader, seized on Mr Hunt's past comments in a letter to Sir Gus. He wrote: "Given these prejudicial statements, there must be serious questions about the decision to ask Mr Hunt to carry out this quasi-judicial role."

Sir Gus swiftly replied that David Cameron had sought his advice about switching responsibility for the BSkyB deal to Mr Hunt. He said: "I took advice from lawyers and, in providing advice that there was no such impediment, I was, of course, aware of the former statements from Mr Hunt which you cite. I am satisfied that those statements do not amount to a pre-judgement of the case in question."

But John Denham, the shadow Business Secretary, said: "It is very hard to see how any decision Jeremy Hunt makes will enjoy complete confidence."

Ofcom, the media regulator, is due to report on the proposed acquisition by the end of the month. Mr Hunt will then have to decide whether to refer the takeover to the Competition Commission. It would then consider whether the takeover would undermine the plurality of the media. But the final decision will rest with the Culture Secretary. He has to act in a quasi-judicial capacity, meaning he is banned from seeking advice from government colleagues.

Mrs Cable stands by her man

As Vince Cable kept out of the spotlight yesterday, his wife Rachel stepped briefly into it to stand by her man.

She told journalists camped outside his semi-detached house in Twickenham, south-west London: "He's fine. He never was going into London this morning. It is not a new decision, he's working from home. He hasn't anything further to say at the moment."

The Business Secretary's low profile prompted speculation that he might resign from the Government. But his wife said she was not aware of him having any thoughts about quitting. "As far as I know, not," she said before hurriedly adding: "I don't think I am going to speak for him on any of these matters."

Mrs Cable politely told the reporters they would be wasting their time if they remained outside the house because her husband would not be speaking publicly.

A government insider said Mr Cable was likely to "keep his head down" in the hope that the storm over his remarks about Rupert Murdoch would die down over the Commons Christmas recess, which began yesterday.

Andrew Grice

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