The British government has given qualified approval to Rupert Murdoch's News Corp. to take full control of satellite broadcaster British Sky Broadcasting, but set further conditions on Thursday.
To allay concerns about media dominance, News Corp. had offered to spin off Sky News as a separate company. News Corp. already owns The Sun, Britain's largest-circulation newspaper, The Times, The Sunday Times and the Sunday tabloid News of the World.
Culture Secretary Jeremy Hunt accepted that plan. However, Hunt said Thursday that he also wants Sky News to have a senior journalist on its board, a monitoring trustee to ensure that News Corp. complies with conditions, and a requirement that Sky continue to promote Sky News on its satellite channels.
The announcement provoked sharp exchanges in the House of Commons.
"This seedy deal would shame a banana republic," Tom Watson of the opposition Labour Party told Hunt.
"You have chosen to accept the assurances of News Corp. when they have breached previous assurances made when The Times, the Sunday Times, the Sun, and the News of the World were taken over," Watson said.
Hunt said he was conscious that politicians' motives would be questioned in this case, and that was why he had taken advice from regulators at every stage.
Watson and others contended that the continuing criminal investigation of phone hacking at the News of the World raised questions about News Corp.
"How on Earth did we become so spineless as to allow a company whose directors not only failed in their duties to prevent criminality at the News of the World, but actually participated in the cover-up of that criminality, to hold dominion over such vast swaths of the media in this country?" said Labour's Chris Bryant.
The phone hacking was "incredibly serious," Hunt said, but it was not an issue in deciding whether to approve the buyout.
News Corp. and BSkyB, in separate brief statements, noted Hunt had published proposals but did not immediately respond to them.
BSkyB shares down 1 pence at 847 pence on the London Stock Exchange following Hunt's announcement.
News Corp. made an initial indicative offer of 700 pence per share to buy the 61 percent of the shares it doesn't already hold, valuing BSkyB at 12.3 billion pounds ($19.8 billion).
Analysts believe News Corp. may have to go as high as 900 pence per share to persuade shareholders to sell out.
Hunt has been negotiating with News Corp. on terms for the proposed buyout rather than referring the issue to the Competition Commission for a lengthy inquiry.