The Competition Commission is well within its powers to compel BSkyB to sell some or all of its 17.9 per cent stake in ITV, according to competition lawyers — although when, and at what price, is up for discussion.

Under the Enterprise Act 2002 — the wide-ranging legislation governing UK competition rules — the commission has the authority to impose various remedies to fix a situation in which it believes a significant shareholding substantially lessens competition.

Forcing a company to sell its stake in a rival is one such remedy that is often used.

However, such sales are generally limited to takeover or merger situations where the combination of two businesses would distort the market.

For example, when Somerfield acquired a group of shops from Wm Morrison in 2005, competition authorities forced it to sell on 12 of those outlets after the deal was signed to preserve competition in some regions of the UK.

Forcing the sale of a stake in a non-takeover or merger situation is much less common, though it is not unprecedented.

In 1992 the European Commission ordered Gillette to sell a 22 per cent holding in the parent company of the arch rival Wilkinson Sword after deciding that the shareholding could affect competition in the European shaving market.

Gillette had not made an offer to buy its rival at the time it was ordered to sell.

In the UK, in 1998, what was then the Monopolies and Mergers Commission ordered the Kuwait Investment Office, a government agency responsible for managing some of the country's oil wealth, to sell half of its 21 per cent stake in BP because of similar concerns.

Again, no takeover or merger was imminent when the order was made.

In BSkyB's case, the commission could allow it to keep its stake in ITV on the condition that it refrain from using its voting powers to influence commercial decisions.

But Pat Treacy, a competition expert at the law firm Bristows (which is not involved in the case), said that an order for the broadcaster to sell all or part of its stake was the most likely outcome.

Ms Treacy said: “Forcing a stake sale is the Competition Commission’s preferred option in this type of situation because it sees that as a clean and clear remedy.”

Lawyers believe that BskyB will be concentrating its attention on how much to sell, when and at what price.

To avoid a "firesale" in which it dumps its entire stake on the market at once, most likely at a significant loss, Ms Treacy said that the commission would probably allow the broadcaster to sell over time in several chunks.

However, Michael Grenfell, a competition partner at Norton Rose, said that the market would be aware that whatever BSkyB negotiated with the commission, it would still need to sell its stake within a fixed period — usually six months — which would weaken its negotiating position with potential buyers.

Sky paid £940 million for the stake last year and faces a huge loss if it is forced to sell.

If it sold at this morning's price of 102.5p, the satellite broadcaster would lose about £226 million on the transaction.

Another option to avoid potential heavy losses would be for BSkyB to engineer a "friendly sale" of its stake to another company in the News Corporation group at a better price. BSkyB is 39.1 per cent owned by News Corporation, the parent company of Times Online.

Although this is technically legal, Ms Treacy believes that the commission would scrutinise any such sale carefully and could block it.

If BSkyB is ordered to sell the stake against its will it can still appeal to the Competition Appeals Tribunal.

But Becket McGrath, a competition partner at Berwin Leighton Paisner, said such an appeal could only be launched on the grounds of a judicial review, questioning whether the Competition Commission acted unlawfully or unreasonably in reaching its conclusion.

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