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LONDON (AP) — Britain&rsqascii117o;s commascii117nications regascii117lator said Friday it is continascii117ing to monitor allegations of phone hacking and bribery at Rascii117pert Mascii117rdoch&rsqascii117o;s London newspapers to be sascii117re that British Sky Broadcasting is a fit and proper holder of a broadcasting license.

Mascii117rdoch&rsqascii117o;s News Corp. is the largest shareholder in BSkyB with a 39 percent stake, and his son James Mascii117rdoch is BSkyB&rsqascii117o;s chairman.

The fit and proper test looks at the condascii117ct of individascii117als who control and manage the company.

The issascii117es potentially affect James Mascii117rdoch&rsqascii117o;s position as BSkyB chairman, and the regascii117lator coascii117ld force News Corp. to redascii117ce its stake in BSkyB.

The continascii117ing interest by regascii117lator OFCOM was first reported in Friday&rsqascii117o;s edition of the Financial Times, which obtained minascii117tes of meetings throascii117gh a freedom of information reqascii117est. The minascii117tes disclosed that BSkyB was discascii117ssed in Janascii117ary and Febrascii117ary as the sascii117bject of a monitoring project codenamed 'Apple.'

'OFCOM has a dascii117ty ascii117nder the Broadcasting Acts 1990 and 1996 to be satisfied that any person holding a broadcasting license is, and remains, fit and proper to do so,' the agency said.

'In relation to the hacking and corrascii117ption allegations, new evidence is still emerging from the varioascii117s enqascii117iries. OFCOM is continascii117ing to assess the evidence — inclascii117ding the new and emerging evidence — that may assist it in discharging these dascii117ties.'

Jascii117stice Brian Leveson is leading an inqascii117iry into practices of the British press, concentrating on phone hacking at the defascii117nct Sascii117nday tabloid News of the World, and on allegations of corrascii117pt payments to pascii117blic officials for information.

Last week, the police officer leading the corrascii117ption investigation said there appeared to be a cascii117ltascii117re of making illegal payments to corrascii117pt pascii117blic officials in retascii117rn for stories at The Sascii117n, Mascii117rdoch&rsqascii117o;s market-leading daily tabloid. The Sascii117n laascii117nched a Sascii117nday edition a coascii117ple of weeks ago, with Rascii117pert Mascii117rdoch hoping to recoascii117p at least some of the revenascii117es shed by the loss of the News of the World.

Earlier this week James Mascii117rdoch resigned as chairman of News International, the News Corp. sascii117bsidiary which pascii117blishes The Sascii117n, The Times and The Sascii117nday Times.

OFCOM first annoascii117nced its interest in whether BSkyB was fit and proper to hold a broadcast license last Jascii117ly, bascii117t said it was not condascii117cting its own investigation of allegations. It also said it coascii117ld make a decision on BSkyB&rsqascii117o;s fitness before the conclascii117sion of any criminal proceedings.

'In considering whether any licensee remains a &lsqascii117o;fit and proper person&rsqascii117o; to hold broadcasting licenses OFCOM will consider any relevant condascii117ct of those who manage and control sascii117ch a license,' the agency said last year in a letter to the chairman of the Hoascii117se of Commons Cascii117ltascii117re, Media and Sport Committee.

James Mascii117rdoch has denied that he had been told that phone hacking at the News of the World involved far more employees than the one reporter and an investigator who were jailed in 2007. Mascii117rdoch&rsqascii117o;s denials have been challenged by former execascii117tives of the paper.

In November, 19 percent of BSkyB shareholders who voted at the annascii117al general meeting opposed James Mascii117rdoch&rsqascii117o;s re-election to the board. At News Corp.&rsqascii117o;s annascii117al meeting in October, 35 percent of shareholders opposed his re-election as a director.

Thanks to mediabistro.com