News Corporation gets EU boost to take control of BSkyB

News Corp, which owns The Sun and The Times, wants to buy the 61 per cent stake of the broadcaster it does not already own for 7.8bn.

The European Commission (EC) approved the deal, but the group still faces the scrutiny of UK industry regulator Ofcom, which will decide by December 31 whether to refer the bid to the Competition Commission.

Joaquin Almunia, EC vice president and commissioner for competition, said: "I am confident this merger will not weaken competition in the UK. The effects on media plurality are a matter for the UK authorities."

Ofcom's report was due to be sent privately to Business Secretary Vince Cable who was going to publish his own report and decision in the new year. However, Prime Minister David Cameron ruled yesterday that he will now play no part in the decision following indiscreet comments about Rupert Murdoch,

Mr Cable's Department for Business, Innovation and Skills has been stripped of responsibility for media competition and policy issues, which are transferred to the Department of Culture, Media and Sport, headed by Jeremy Hunt.

Mr Cable said in a statement: "I fully accept the decision of the Prime Minister and Deputy Prime Minister. I deeply regret the comments I made and apologise for the embarrassment that I have caused the Government."

The plans were referred to Ofcom on public interest grounds amid fears the deal involving the Sky News owner posed a threat to media plurality.

But BSkyB previously said rejecting the bid on the grounds of it reducing the number of independent voices in the market "could perversely increase the risk of that very situation".

The EC said the deal would not impede effective competition in Europe, in both the broadcast and print media, and the advertising sector.

In June, BSkyB rejected News Corp's 700p-a-share approach – which values the FTSE 100 Index company at around 12bn.

BSkyB said the proposal significantly undervalued the business and called for an offer in excess of 800p a share when it was approached in June.

But despite their differences over price, the two parties agreed to work together on the regulatory process required for a tie-up.