U.K. Business Secretary Stripped of Oversight of News Corp./BSkyB Deal

Carl Court/AFP/Getty Images

LONDON – British Business Secretary Vince Cable has been stripped of his responsibilities to decide the outcome of News Corp's $12 billion bid for BSkyB after he told undercover reporters that he had "declared war" on Rupert Murdoch and would block the deal.

After a turbulent day in British politics, Prime Minister David Cameron said late Tuesday that Cable will remain in the Cabinet, but that Culture Secretary Jeremy Hunt will now oversee the remainder of the process and make the final decision on the deal.

Cameron branded Cable's comments "totally unacceptable and inappropriate" and said that Cable would play "no further part" in the process.

"Following comments made by Vince Cable to the Daily Telegraph, the prime minister has decided that he will play no further part in the decision over News Corporation's proposed takeover of BSkyB," a Downing Street spokesman said.

"In addition, all responsibility for competition and policy issues relating to media, broadcasting, digital and telecoms sectors will be transferred immediately to the Secretary of State for Culture, Media and Sport."

In secretly recorded comments to undercover reporters for The Daily Telegraph, the business secretary was heard to say that he would block the deal, even though he has yet to receive recommendations on the deal from media regulators.

"I have declared war on Mr Murdoch and I think we're going to win," he told two reporters posing as party supporters in his constituency.

Later in the same conversation he said that he would use his influence to block the deal.

"I have blocked it, using the powers that I have got. And they are legal powers that I have got. I can't politicize it, but for the people who know what is happening, this is a big thing. His whole empire is now under attack.

The interview carried out by undercover Telegraph reporters was not used by the newspaper, which is vociferously opposed to News Corp's bid for the 61% in BSkyB that it does not already own and favors Cable's decision to block the deal.

It only came to light after being leaked to the BBC's political editor, Robert Peston, who said "a whistleblower" came to him with it after the comments were left out of The Telegraph's original reporting.

European Commission cleared the deal earlier Tuesday.

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