The British government referred News Corp.'s bid for British Sky Broadcasting to competition authorities for a review, in effect delaying a final decision for several months.
That announcement Monday from Culture Secretary Jeremy Hunt followed News Corp.'s withdrawal of a promise to spin off Sky News, which had been a condition for buying the 61 percent of BSkyB shares that it doesn't already own.
Britain's Competition Commission now must hold a full-scale inquiry into whether the takeover would break anti-monopoly laws.
News Corp. acted as the government was facing intense pressure to block the bid following revelations of phone hacking activity at the Sunday tabloid News of the World.
"News Corp. continues to believe that, taking into account the only relevant legal test, its proposed acquisition will not lead to there being insufficient plurality in news provision in the UK," the company said.
Earlier, some analysts in London were pronouncing the takeover bid to be all but dead.
"It is unlikely that approval could be granted until the criminal investigation into phone-hacking and subsequent related public enquiries have been completed, which could take years," said Sam Hart, an analyst at Charles Stanley.
A failure to clinch the 7.5 billion pound ($11.9 billion) takeover would represent a huge setback for Murdoch, who has built up a global empire over four decades. As well as owning Fox News and the 20th Century Fox film studio, News Corp. owns a raft of newspapers and media outlets all round the world.