Murdoch eyeing Channel 5

Rupert Murdoch was today handed an opening to take over Channel 5 - giving him a first foothold in British terrestrial television.

Troubled parent group Bertelsmann is to consider selling its controlling stake in the broadcaster, valued at up to £1 billion.

The move could be part of a shake-up at the German media giant ordered by new chief executive Gunter Thielen, who replaced Thomas Middlehoff in a row over strategy.

One company insider told the Financial Times: "He is going to look at every business that is not profitable, and will make some tough decisions about them."

Mr Murdoch's Australian-based News Corporation, which already controls satellite broadcaster BSkyB, is keen to move into British terrestrial TV. Channel 5 could provide the opening it needs.

But a bid would put ministers on the spot over whether to approve or block the deal. The Government has set out plans to open the way for Mr Murdoch to make a move, by scrapping a ban on non-European firms owning British terrestrial channels.

But critics have accused ministers of striking a deal to let the media baron expand his empire in return for political backing from his newspapers. A powerful committee of MPs and peers, headed by former filmmaker Lord Puttnam, will warn tomorrow that opening up British television to more compeition would lower the quality of programming.

The Government has dismissed the charge and vowed to press ahead with its plans, outlined in the draft Communications Bill.

Bertelsmann owns 65 per cent of Channel 5. Mr Thielen has ordered a review of the group's businesses which also include publisher Random House and music group BMG.However, Bertellsman and News Corp are arch rivals. One ITV executive said: "Thomas nor his succesors would want to sell to News Corp, if only to avoid strengthening BSkyB."

Labour has worked hard to win the backing of Mr Murdoch's newspapers, which include The Times and The Sun.

Both are eurosceptic, but the strength of their opposition could be vital to the result of a euro referendum if the Gover nment decides to hold one.

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