News Corporation, parent company of The Times, and Dow Jones yesterday reached agreement on mechanisms to safeguard editorial independence, opening the way for a takeover of the publisher of The Wall Street Journal.

The proposals now have to be put to the Bancroft family, who control Dow Jones. It is not yet certain that a sufficient number of Bancrofts will agree to the plan – but the board recommendation makes it more likely they will do so.

Three Bancroft family members and the family’s principal lawyer sit on Dow Jones’s board, which means that the family will already have some knowledge of the arrangements, which have been significantly revised since Friday.

It is not clear whether there is also agreement between News Corp and Dow Jones over price, although News Corp’s $60-a-share indicative offer is not considered to be a stumbling block because the figure represented a 67 per cent premimum over Dow Jones’s prevailing share price when the deal leaked.

The two sides have agreed to create a special board, which is designed to help to preserve the independence of the managing editor of the WSJ.

The board will have some rights with respect to the appointment or dismissal of editors – although its precise membership and composition remains unclear. Other key staff, most notably the WSJ’s opinion page editor, may also be included.

There is also agreement on a basic set of journalistic principles, after Dow Jones board members persuaded News Corp to adopt a special code for the specialist financial publication. The funding of the special committee, and a clarification of its ability to take legal action to enforce the principles, are also expected to feature.

The Dow Jones board took over negotiations on editorial independence from the Bancroft family last week after the family took two weeks to put together a four-page proposal that was almost immediately rejected by News Corp because it would have left too much control in family hands after a sale. With less emotional attachment, it proved easier for the board to reach agreement.

The Bancroft family has controlled Dow Jones since 1902.

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