News Corp's bid to take over British satellite broadcaster BSkyB is being referred to the Competition Commission, amid growing pressure on the media group. Earlier in the day, Britain's Deputy Prime Minister, Mr Nick Clegg, urged Mr Rupert Murdoch, now in London, to drop his bid.

The Commission would have a “full and exhaustive consideration of the merger, taking into account all recent relevant developments”, the Culture Media and Sport Secretary, Mr Jeremy Hunt, told Members of Parliament on Monday afternoon. It followed News Corp's decision to withdraw a previous promise to spin-off Sky News should it win the bid.

In the wake of revelations about the ‘grotesque' practices at News of the World, the News Corp tabloid embroiled in the phone hacking scandal, Mr Clegg urged Mr Murdoch to “do the decent thing” and reconsider the bid. “Look at how people feel about this and look at how the country has reacted with revulsion,” he told the BBC Monday, in the clearest condemnation to come out of the Government to date.

The Labour Party has said they will force a vote on the issue during an Opposition Day debate due to take place in the House of Commons on Wednesday. Mr Vincent Cable, the Business Secretary and member of the Liberal Democrats, told a press conference on Monday that the party was yet to decide which way it would vote, though all along it had approached the issue without “fear or favour”.

News Corp's decision to close the 168-year-old paper “the past Sunday's issue was its last” has done little to quell public anger. The scandal began in 2006, with the arrest of the News of the World's Royal editor and a private investigator hired by the paper over the illicit hacking of phone messages of members of the Royal household. Since then it has continued to simmer, with revelations that the phones of celebrities and politicians had been hacked doing little to capture the public imagination.

It is only since last week, when reports surfaced that the paper had hacked into the voice mail of Milly Dowler, a schoolgirl who was murdered in 2002, that the public backlash began. It didn't stop there: families of the terrorist attacks on London are among those who have been warned by police that their phones may have been tapped by the paper. Scotland Yard is also considering whether the company made substantial payments to senior police officials.

Till recently, the Government had said its hands were tied, and that the allegations couldn't play a role in determining whether or not the takeover of BSkyB could go ahead. However, it emerged that Mr Jeremy Hunt had written to OFCOM, the media regulator, and the Office of Fair Trading on Monday to seek their advice on how to proceed. The Prime Minister has already announced a judge-led inquiry to examine why the first police investigation into the hacking scandal failed, and a separate inquiry, beginning this summer, into how newspapers are regulated.

Mr Rupert Murdoch arrived in London on Sunday to deal with the crisis, giving Mr Rebekah Brooks, the embattled head of News International his full backing. “Our proud tradition of journalism was shaken by the revelations,” said Mr Hunt.

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