Cable was referring to his decision to ask Ofcom to investigate Murdoch's proposed bid to take full control of Sky on grounds of public interest.
His outburst was captured by two Daily Telegraph reporters posing as constituents, but held back from the newspaper's exclusive front-page story today.
However, the comments were leaked by the BBC business editor Robert Peston on his blog. The full interview transcript had been handed to Peston by "a whistleblower" upset that Cable's "explosive" outburst was omitted by the newspaper.
The business secretary is quoted as telling the reporters: "I am picking my fights, some of which you may have seen, some of which you may haven't seen (sic).
"And I don't know if you have been following what has been happening with the Murdoch press, where I have declared war on Mr Murdoch and I think we are going to win."
Today, the European Commission gave its unconditional clearance for News Corp's bid to acquire the 61% of Sky that it does not already own.
However, Peston noted that Cable will have the final say on whether the takeover will be blocked on grounds of its impact on media plurality in Britain.
In the undercover interview, Cable said: "He has minority shares and he wants a majority - and a majority control would give them a massive stake.
"I have blocked it using the powers that I have got and they are legal powers that I have got. I can't politicise it but from the people that know what is happening this is a big, big thing.
"His whole empire is now under attack. So there are things like that we do in government, that we can't do... all we can do in opposition is protest."
In a statement, News Corp said that it is "shocked and dismayed" by Cable's comments.
Speaking on the BBC News channel, Peston said that Cable's outburst will mean that he is no longer suitable to give final ruling on the Sky takeover.
"It's extremely clear that News Corp will say categorically that he cannot now make the decision on this takeover," he said.
"If he can't, either they have to find a mechanism for someone else to make the decision or he has to resign. Those are the only options for Mr Cable. He has to do quite a lot of explaining quite quickly."