Britain intends to refer Rupert Murdoch's takeover of Sky to a full investigation because the deal raises concerns about the amount of influence the media mogul would wield.
"I am minded to refer to a Phase 2 investigation on the grounds of media plurality," Media Secretary Karen Bradley told lawmakers. "The reasoning and evidence on which Ofcom's recommendation is based are persuasive."
"The proposed entity would have the third largest total reach of any news provider - lower only than the BBC and ITN - and would, uniquely, span news coverage on television, radio, in newspapers and online," Bradley said.
Last week, two regulators submitted their findings to the government after being asked to look into whether Fox would have too much control of the media, and whether it would be committed to upholding broadcasting standards if the deal went ahead.
The government said on Thursday it did not think the deal raised any problems around the issue of broadcasting standards. Ofcom had no concerns about Fox's genuine commitment to broadcasting standards—a second test for a deal, she said.
Shares in Sky have been trading at a discount to the 10.75 pounds offer, indicating that although investors were not expecting outright rejection, there was still some concern about any undertakings required from Fox to get the deal through.
Shares in Sky rose after the statement and were trading up 3% at 986 pence at 1110 GMT.