The News Corp-Sky deal will not be referred to the Competition Commission for the time being (Photo of Jeremy Hunt: David Jones, PA)

Jeremy Hunt, the British culture secretary, announced on Tuesday that he would delay a decision over whether to refer News Corporation's controversial proposed takeover of BSkyB to the country's competition watchdog.

The culture secretary's announcement buys more time for both himself and News Corp in the face of ongoing scrutiny of the deal, which would lead to News Corp purchasing the remaining 60.9 per cent of Sky that it does not already own. A report by the media regulator Ofcom recommended that the deal be sent onto the Competition Commission for a full inquiry.

In a statement, Hunt attempted to walk a tightrope by saying that although he "intend[s] to refer the merger to the Competition Commission" because of News Corp's failure to offer sufficient plurality assurances, he could be persuaded otherwise if the company were to make fresh commitments that would assuage concerns.

"On the evidence available, I consider that it may be the case that the merger may operate against the public interest in media plurality," he said.

“However, before doing so it is right that I consider any undertakings in lieu offered by any merging party which have the potential to prevent or otherwise mitigate the potential threats to media plurality identified in the Ofcom report.

“News Corporation says that it wishes me to consider undertakings in lieu which it contends could sufficiently alleviate the concerns I have such that I should accept the undertakings instead of making a reference."

Hunt defended his decision to wait for new undertakings from News Corp, describing the step as "entirely appropriate". But by deferring his decision about whether to refer the deal to the Competition Commission, the culture secretary - who has a history of making highly complimentary remarks about Rupert Murdoch's media empire - has given further ammunition to rival media organisations' claims that the Government has given News Corp special treatment.

Ivan Lewis, the shadow culture secretary, said that Hunt had "chosen an unprecedented course of action" by offering the corporation an opportunity to avoid Competition Commission scrutiny.

"Jeremy Hunt has real questions to answer about whether he is being even-handed. All of this risks undermining public confidence in what should be a quasi-judicial process," Lewis said.

"Hunt has received a clear recommendation from Ofcom and by his own admission has been unable to agree remedies with News Corp which would address public interest concerns."

News Corp maintains that the proposal, which was cleared last year by European regulators, would not harm media plurality in the UK. Following Hunt's announcement of a deferral, it hit out at Ofcom's report, claiming that the analysis was "deficient in a number of ways".

"News Corporation continues to believe that its proposed acquisition of the shares in BSkyB it does not own will not lead to there being insufficient plurality in news provision in the UK," the company said in a statement.

The News Corp-Sky buyout proposal has sparked heated debate over the last year. The deal would result in News Corp taking full control of the UK's largest and most influential subscription television providers, including its 24-hour news channel Sky News. News Corp may be forced to cut Sky News loose in order to see the deal go through.

Media Spy discussion: BSkyB