Regulator's decision on News Corp 'may take years'

Ofcom is highly unlikely to make any decision about whether Rupert Murdoch's News Corp is fit and proper for many months - if not years - and has virtually no powers to force the company to sell its BSkyB stake.

That was the verdict from several leading media lawyers today - as well as guidance from Ofcom itself.

Political pressure has been mounting for the regulator to look at whether News Corp, a 39% shareholder in Sky, is fit and proper because of phone-hacking.

Ofcom has the power to revoke a broadcasting licence, but experts said it would not conduct any test until allegations were proven - and probably only after the judge-led public inquiry is completed.

Eleanor Steyn, lawyer at Michael Simkins and a former Ofcom executive, said: "That's probably quite sensible as Ofcom doesn't have investigative powers that the judge has."

Tony Ghee, partner at Taylor Wessing, said: "Ofcom is not going to rush into this. They're going to wait and see who gets collared."

If the regulator decided that certain controlling shareholders or directors were not fit and proper, it almost certainly would not force News Corp to sell some or all of its BSkyB stake.

Instead, Ofcom would be expected to ask News Corp itself to remedy the situation - probably by removing any director who was convicted of illegal behaviour or not considered appropriate.

Ghee said: "Normally the director would step aside and that would solve the problem and then the company's not tainted."

Some critics have suggested that James Murdoch, who chairs the UK newspaper arm News International and BSkyB, could quit, although there is no evidence he has done anything wrong.

Ghee said there would be "massive ramifications" if Rupert Murdoch were directly involved in the phone-hacking scandal.

Some observers have suggested that News Corp could be forced to cut its holding in BSkyB to below a controlling 29.9% level or even down to zero.

However, Steyn said such drastic action was "highly unlikely".