News Corporation has confirmed that James Murdoch, the chief executive of BSkyB, has been appointed as its new chairman and chief executive for Europe and Asia.

Mr Murdoch, who will be based in London, will step down from his role as chief executive at BSkyB but will become non-executive chairman and succeed his father, Rupert Murdoch, who has stepped down as a director of the broadcasting group.

He will report to Peter Chernin, president and chief operating officer of News Corporation.

James Murdoch will be replaced by Jeremy Darroch, who is the chief financial officer of BSkyB. Sky is 39.1 per cent owned by News Corp, parent company of The Times.

Les Hinton, the executive chairman of News International, the company that directly owns The Times, has also been confirmed as the chief executive of Dow Jones to replace Richard Zannino, who is leaving the company.

News Corp is acquiring Dow Jones for about $5 billion (£2.5 billion) in a deal that is expected to close next week.

Commenting on the appointment, Rupert Murdoch, chairman and chief executive of News Corporation, said: "James is a talented and proven executive with a rare blend of international perspective and deep, hands-on experience in improving operational results. This is the right time to align our operations in Europe and Asia under new, structured group leadership."

The decision to move James Murdoch clearly positions the 34-year-old as the most likely successor to his father's leading roles at News Corp, the media group that also owns the MySpace website and the Fox film studio.

James Murdoch, who was previously a member of News Corp's board between 2000 and 2003, said today: "I am excited to be rejoining News Corporation in this new role leading News Corporation's businesses across Europe and Asia, and I am delighted to continue working with the exceptional team at Sky in my new role as non-executive chairman and as a director."

Insiders at BSkyB were at pains to emphasise that the appointment of Mr Darroch had followed a rigorous process led by Nicholas Ferguson, the independent non-executive director.

Mr Hinton, who has been with News International for 12 years, said today: "Dow Jones, with its most famous property, The Wall Street Journal, is a formidable organisation packed with talented people.

"It has many opportunities and challenges in common with News International. Both companies can learn from each other, and we will benefit greatly from sharing ideas."

The last element of the reshuffle is expected to include the appointment of a new editor of The Times, as Robert Thomson is expected to join Dow Jones as publisher.

There has been no formal confirmation of who will become The Times editor.

James Murdoch’s responsibilities will include running News Corp’s London-based newspapers, which, as well as The Times, include The Sun, The Sunday Times and the News of the World.

Elsewhere in Europe and Asia, News Corp owns Sky Italia, the satellite broadcaster, and Star Television, the pan-Asian TV group. It will be the first time that News Corp has created such a powerful role outside its New York headquarters.

Under James Murdoch’s leadership, Sky moved aggressively into supplying broadband internet services in addition to its core pay-television business. The move rapidly won customers but the venture is not expected to break even until 2010.

Acutely conscious of his company’s relationship with News Corp, Mr Murdoch had always emphasised some distance from the business his father built while he was running Sky.

When asked whether he would move over to News Corp, he would reply that they were “stuck with me for a long time yet”.

James Murdoch steps down from Sky at a time when the satellite broadcaster is beset by regulatory battles over its decision to buy a 17.9 per cent stake in ITV and complaints about its conduct in the pay television market, which it rejects.

Mr Darroch was a key ally of Mr Murdoch in the decision to buy the stake in ITV and in the company’s strategic development. His succession will come as little surprise.

Mr Darroch was formerly chief financial officer of Dixons, the electrical retailer, before joining Sky under Mr Murdoch as a key appointment designed to emphasise the independence of the company from the Murdoch family.

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