News Corporation, the parent company of The Times, officially unveiled its new management lineup yesterday, effectively confirming James Murdoch as heir to his father’s media empire despite concerns from some shareholders about the young Mr Murdoch’s decision to become chairman of BSkyB.

The 34-year-old will now run News Corp’s European and Asian holdings and retain his London base. That structure is designed to free up time for his 76-year-old father, Rupert Murdoch, who will, in the coming months, concentrate on the integration of Dow Jones.

Rupert Murdoch is setting up an office in Dow Jones’s downtown Manhattan headquarters and is expected to spend at least a day a week there once the deal completes, as he repositions The Wall Street Journal to compete more directly with The New York Times.

To emphasise the point, Mr Murdoch decided to let Richard Zannino, the chief executive of Dow Jones, leave. He is to replaced by Les Hinton, executive chairman of News International in London, who has spent his entire 40-year career at News Corp.

Lorna Tilbian, an analyst at Numis Securities, said: “There have been many rumblings about James being the heir apparent to his father, Rupert, at News Corporation. News is actually quite a big company and if he is one day going to run it, he needs to get on and take one part of it.”

Although Sky is Britain’s largest broadcaster by market value, News Corp in Europe and Asia is substantial and more complex. The operations now under James Murdoch’s ambit include two big pay television broadcasters, with Star in China and across Asia, and Sky Italia in Italy.

Until recently, Mr Murdoch’s most obvious successor was the company No 2 Peter Chernin, the chief operating officer, whose strength is in the American film and television business. However, James Murdoch’s success in running the publicly listed Sky, which is 39.1 per cent owned by News Corp, has shown that unlike his elder brother, Lachlan, who resigned from the business in 2005, he is comfortable with managing a large company.

However, James Murdoch’s decision to step up to the chairmanship of BSkyB, symbolically vacated by his father, has prompted questions from one of its key shareholders. Legal & General is worried that Jeremy Darroch, Sky’s new chief executive, will be unable to operate independently.

L&G told Sky of its concerns on Thursday after the company canvassed its four largest independent shareholders. It is understood that the three others - Franklin Templeton, Capital Group and Janus Capital – all indicated that they were content. News Corp’s holding in Sky is large enough to mean that the independent investors will be unable to force the company to reconsider.

James Murdoch had indicated that he was willing to step up to become News Corp’s chief executive of its European and Asian operations more than six weeks ago, as part of a wider corporate reshuffle.

Sky decided that it would examine several potential candidates to become chief executive, and asked the head-hunter Jan Hall to draw up a list of possible candidates that could be approached, although in the end nobody was interviewed. The board members handling the process, who were led by Nicholas Ferguson, the chief executive of SVG Capital, who is the senior independent director, instead concluded that Mr Darroch, the chief financial officer, and a close ally of James Murdoch, was best placed to take over.

Although most of James Murdoch’s career has been in pay television – he previously ran the Asian broadcaster Star TV before taking the helm at Sky in November 2003 – he is believed to have been a keen advocate of the acquisition of the No 1 social networking website MySpace.

Sky shares fell after news of James Murdoch’s departure was announced, although they raillied to end the day off only 3½p at 601p. However, Steve Liechti, an analyst at Investec Securities, said that the change was “neutral overall”. In a circular, the bank said that “we rate [Jeremy] Darroch highly and believe that he is at the very least a safe pair of hands”.

James Murdoch joined Sky at the beginning of November 2003, amid a dispute that nepotism prompted his appointment. He repositioned the company to move into broadband, investing £400 million, and the company signed up more than one million subscribers.

Ms Tilbian said: “Sky used to be an expensive treat for people who wanted to watch television, but now people go to Sky to cut their broadband bill – which makes the company much more financially resilient in an economic downturn.”

However, the new subscribers failed to lift the company’s share price. Dividends excluded, the shares are down 9 per cent since Mr Murdoch took over.

The pugnacious Mr Murdoch also leaves Sky fighting on a series of regulatory fronts, and in particular is staring at a £360 million loss on its investment in ITV. The Competition Commission is expected to rule this month on how much of the ITV stake Sky will have to sell.

The share swoop on Sky’s commercial rival was seen as a daring way of stopping Virgin Media from winning control of ITV, but in the words of one rival television executive “it was a major gamble, that has not really justified itself, to stop a deal that probably wasn’t going to happen anyway”.

Who’s who

James Murdoch, 34, is the younger son of Rupert Murdoch, the chairman and chief executive of News Corporation, and is now widely considered to be his most likely successor. James is now the only one of Rupert’s children who is active in the business, after the departure of his elder sister, Elisabeth, and brother, Lachlan, in recent years. He studied at Harvard but left without completing his degree, although while there he was a contributor to Harvard Lampoon, a satirical magazine on whose board he still sits. After leaving university he began his media career, setting up the short-lived Rawkus Records, a rap label, before joining News Corp to run its digital activities in the late 1990s. He was promoted to become the chief executive of Star Television in Hong Kong in 2000. He is a black belt in karate, a martial art that he learnt while running Star in Hong Kong.

Les Hinton, 63, began in newspapers as a copy boy at the age of 15 and has spent his entire career working for News Corp, becoming one of Rupert Murdoch’s most-trusted executives. Born in Liverpool, Mr Hinton’s family emigrated to Australia, where he began work as a reporter for the Adelaide News. He worked as a journalist and executive in Australia, the United States and Britain. He spent 20 years in the US, as a correspondent and latterly as an executive at Fox television and News America Publishing, publisher of the New York Post. In 1995 he was appointed executive chairman of News International, after the company had run into financial difficulties, overseeing The Times, The Sunday Times, The Sun and News of the World.

Jeremy Darroch’s appointment as chief executive of BSkyB, succeeding James Murdoch, comes as little surprise. The 45-year-old was probably James Murdoch’s closest senior colleague; his arrival as chief financial officer in 2004 was seen as an effort to demonstrate the independence of the broadcaster from the owning family. After Sky took its £940 million stake in ITV, Mr Murdoch revealed that he and Mr Darroch had developed the plan during a flight to Spain. Before joining Sky, Mr Darroch was retail finance director and later group finance director at Dixons, and had previously spent 12 years in a variety of roles in the UK and Europe at Procter & Gamble. In 2006 he was also appointed a nonexecutive director of Marks & Spencer.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts