By Phil ScullionFollow @PhilScullion
Culture secretary Jeremy Hunt has said he is "minded to accept" assurances on the spinoff of Sky News to facilitate a merger between News Corporation and BSkyB.
The spinoff, which would see Sky News operating as a separate company but still funded by News Corp, is seen as a key condition if News Corp is to avoid being referred to the Competition Commission over its BSkyB takeover.
It has not proved enough to win over the Liberal Democrats, however. The coalition's junior party is now calling for the media plurality rules laid down by the last government to be dropped in favour of stricter ones.
"Those rules aren't good enough and are failing to inspire public confidence," Don Foster, co-chair of the Lib Dems' backbench culture, media and sport policy committee, said.
"Our current, watered down protections were only introduced after a long battle in the House of Lords.
"We need an independent commission to look at plurality and come up with protections that can be trusted."
Mr Hunt has published a set of fresh conditions which have been developed through the consultation process.
These include a requirement that Sky News board meetings include an independent director with senior editorial expertise and the appointment of a monitoring trustee to ensure News Corp sticks to the conditions during the run up to the spinoff.
Sky News' Articles of Association will also have to be approved by the secretary of state, and Sky will have to continue to promote Sky News on its other channels.
Mr Hunt said: "I am aware of the huge interest in the proposed merger and am grateful to those who responded to the consultation. I have considered carefully the points raised and, as at all steps in this process, taken advice from the independent regulators.
"The regulators have confirmed that the proposed undertakings are still sufficient to ensure media plurality.
"I could have decided to accept the original undertakings but a number of suggestions were made in response to the consultation which could further strengthen the undertakings, particularly around editorial independence, business viability and the articles of association."
A fresh consultation process will run until July 8th, at which point Mr Hunt will make a final decision on whether to allow the merger. His alternative is to refer it to the Competition Commission.
The Office of Fair Trading, media regulator Ofcom and an alliance of newspapers including the Guardian, Daily Telegraph and Daily Mail have all expressed concern about News Corp owning too large a proportion of the British media.
Currently News Corp has a 39% stake in BSkyB and owns both the Times and the Sun newspapers.
Ivan Lewis MP, Labour's shadow culture, media and sport secretary, responded: "Jeremy Hunt's handling of this issue continues to raise concerns about the transparency of the process and his impartiality. We have made it clear he should have referred the bid to the Competition Commission for an independent inquiry."
Mr Lewis is also calling for a full independent inquiry into the conduct of the British press as a result of the phone hacking scandal, in which News Corporation is heavily implicated.
"We recognise that the current legal framework does not allow serious admissions of criminal conduct by News International to be taken into account when considering Newscorp's acquisition of BSkyB.
"As the minister responsible for media policy in this country, it is disappointing that Jeremy Hunt has had so little to say on the phone hacking scandal," Mr Lewis added.