BSkyB faces a full investigation into its purchase of a near-18 per cent stake in rival ITV, after Alistair Darling, the Trade and Industry Secretary, today referred the satellite broadcaster's stake to the Competition Commission.

He said: "My decision reflects consideration of the reports I have received from both the Office of Fair Trading and Ofcom and of other representations I have received about this matter. On the basis of the evidence before me, a fuller investigation by the Competition Commission is justified."

The move comes after Ofcom, the media and telecoms regulator, gave warning last month that the acquisition of the stake was anti-competitive and could restrict choice.

The regulator said the move raised public interest issues and could affect the "plurality of news provision for both cross-media and television news in the UK".

The £900 million ITV stake gives BSkyB exposure to the interests of ITN, the ITV and Channel 4 news provider. Its own Sky News operation provides news to its own 24-hour news channel and Five, the fifth terrestrial network.

Ofcom was also concerned by the crossover with UK newspapers. News Corporation, parent company of The Times, The Sunday Times, The Sun and the News of the World, owns 39.1 per cent of BSkyB.

The acquisition of the 17.9 per cent stake in ITV scuppered Virgin Media's hopes of sealing a £5 billion merger with the terrestrial broadcaster last November.

In a statement to the stockmarket today, BSkyB said: "We look forward to engaging with the Competition Commission as the ongoing regulatory process enters its next phase."

Virgin Media and BSkyB have been at loggerheads after the collapse of negotiations over Virgin's right to carry Sky's news and key entertainment channels.

Last month the Office of Fair Trading, which considers cases for referral to the Competition Commission, said the stake purchase was enough to qualify as a merger of the two companies. BSkyB is already banned from holding more than 20 per cent of ITV.

John Fingleton, the OFT chief executive, said at the time: "This partial ownership link between two key players raised significant competition concerns ... Sky's shareholding means that ITV is no longer fully independent, and this may alter the future competitive landscape."

Mr Darling called on the OFT and Ofcom to consider the case for a competition referral in February.

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