Murdoch may lose BSkyB licence amid renewed probe

Notwithstanding the re-launch of the tainted News of the World in a new Sunday avatar, media baron Rupert Murdoch's British holdings continue to be on shaky ground.

Ofcom, the UK media watchdog, is escalating its investigation into whether broadcaster BSkyB, in which Murdoch's News Corp holds a controlling 39 per cent interest, is "fit and proper" to own a broadcasting licence.

Ofcom said on Thursday that it set up a dedicated team in January known as 'project apple' to investigate material emerging from earlier enquiries, including the police investigations into the phone hacking and bribery scandal that forced the closure of News of the World last year.

Murdoch's bid for a full buyout of BSkyB was virtually approved by the government despite intense resistance from other media groups, but fell through in the wake of the scandal.

Ofcom said the investigation is considering the status of both James Murdoch, chairman of BSkyB, and News Corp.

The junior Murdoch has remained chairman of BSkyB despite stepping down as executive chairman of News International, the British newspaper arm of News Corp, last month.