Drop BSkyB bid, Miliband tells Murdoch
Labour leader Ed Miliband has said Rupert Murdoch should "drop the bid for BSkyB" which he said was "untenable" in the light of phone hacking allegations.
He had said he would push for a Commons vote to delay the News Corporation takeover bid on Wednesday.
Deputy PM Nick Clegg has also said Mr Murdoch should "reconsider" the bid.
News Corp has withdrawn its offer to hive off Sky News as part of the deal, effectively asking for it to be referred to the Competition Commission.
The BBC understands that Culture Secretary Jeremy Hunt will confirm that referral in a statement to the House of Commons shortly.
Earlier, Mr Hunt said he had written to Ofcom and the Office of Fair Trading for advice on the deal.
Rupert Murdoch's News Corporation, which already owns a 39.1% share of BSkyB, want to acquire the remaining shares to take full control of the company.
It had been thought that the deal was on track to be approved, after the government said it was minded to accept assurances that Sky News would be spun off as a separate company - rather than refer it to the Competition Commission.
'Fit and proper'
But the latest phone hacking allegations have led to new calls for it to be referred to the body, and for the regulator Ofcom to look at whether News Corporation passes the "fit and proper" test required for ownership of a broadcasting company.
It has been alleged that a private investigator working for the News of the World newspaper hacked into the phone of murdered schoolgirl Milly Dowler in 2002 - when she was missing - and deleted voicemail messages, giving her family false hope that she might be alive.
Mr Murdoch has backed News International chief executive Rebekah Brooks - who was editor of the paper at the time - amid calls for her resignation.
Mr Miliband had already called for the BSkyB bid to be delayed but went further at a press conference on Monday.
He said Mr Murdoch should "drop the bid for BSkyB. He should recognise that the cloud of allegations swirling around News International make it completely untenable for this bid to go ahead".
He also said the prime minister must "come clean" about what he knew about allegations about his former communications director Andy Coulson - another former News of the World editor - saying there were a "whole series of unanswered questions" about the issue.
It follows newspaper reports that Mr Cameron's director of strategy Steve Hilton had been warned by the Guardian editor about various allegations surrounding Mr Coulson - who has denied knowing that phone hacking was taking place while he was editor.
But Mr Miliband rejected allegations that his own communications chief Tom Baldwin, another former News International journalist, had used potentially illegal methods in 1999, when he was working for The Times, to obtain details from a Conservative Party bank account.
Mr Baldwin has been accused by then Conservative chairman Lord Ashcroft of hiring a private detective to "blag" - or obtain by deception - information about donations the peer had made to the party.
Mr Miliband said: "We've spoken to the Times about those allegations they confirm the view that Tom Baldwin was not in a position, nor did he, commission private investigators to illegally look into the affairs of Lord Ashcroft and as far as I'm concerned that is the end of the matter."
Shadow culture secretary Ivan Lewis has written to the head of the civil service, Sir Gus O'Donnell, asking a series of questions about Mr Coulson's appointment as No 10's director of communications.
The Labour leader said the government had been "forced" to backtrack over the BSkyB bid and "now appears to be moving towards my position".
Mr Miliband had been set to use a Labour-led Commons debate on Wednesday to argue that the BSkyB deal should be put on ice until police have finished investigating the phone hacking claims.
But he said that if the "government ends up agreeing with me" then the debate would become "less relevant".
Speaking after meeting the Dowler family on Monday morning, Mr Clegg said Mr Murdoch should "do the decent and sensible thing and reconsider, think again, about your bid for BSkyB". He was backed by the Conservative MP - and chairman of the Commons culture, media and sport committee, John Whittingdale.
Culture Secretary Mr Hunt has written to Ofcom asking if its previous advice on the deal had changed, in the light of the closure of the News of the World, the "fit and proper persons" test or other implications of the latest allegations
Mr Hunt told the BBC he had decided to write following "horrific revelations" of the past week to see whether they could be considered relevant to the merger bid.
BBC political editor Nick Robinson said Mr Hunt was doing everything he could to delay, if not block, the takeover while ensuring he was not subject to judicial review.
David Cameron's official spokesman said the prime minister would not make any comment on the bid, as he had no role to play in the decision.
"It is a decision for the culture secretary that he takes through a quasi-judicial process and the prime minister is not involved in it.
"There is a specific decision on media plurality and that decision is taken by Jeremy Hunt and by him alone."
He said it was "technically" still possible for Mr Hunt to refer the BSkyB bid to the Competition Commission, if there was new advice from Ofcom or the OFT.