Rupert Murdoch's News International 'bullied Liberal Democrats over Sky bid'

News International reportedly waged a bullying campaign against senior Liberal Democrats in an attempt to secure approval for Rupert Murdoch's takeover bid for Sky.

The Observer yesterday reported "high level sources" as saying that officials from the embattled newspaper publisher took their lobbying campaign to unacceptable levels last autumn to ensure the government did what they wanted.

One senior party figure said that the Lib Dems were threatened that they would be "done over" by the Murdoch papers, which included the now-defunct News of the World, along with The Sun, The Times and The Sunday Times.

The source also said that News International threatened to persecute the party if business secretary Vince Cable opted to block the takeover.

The claims of bullying tie-up with reports from senior Labour sources that Murdoch executives threatened Ed Miliband's office after the Labour leader criticised News International when it emerged that the News of the World had allegedly hacked the phone of murdered schoolgirl Milly Dowler.

Labour insiders claim that News International executives made clear to Miliband's office that because he had decided to "make it personal" they would do likewise, implying that he would be attacked by their newspapers.

The pressure on the Lib Dems was understood to be at its strongest last year around the time Cable decided to refer the Sky takeover bid to Ofcom for further scrutiny.

However, it relented after Cable was stripped of the power to arbitrate over the takeover in December after he was secretly recorded by newspaper journalists saying that he had "declared war" on Murdoch's media empire.

News Corp ultimately decided to withdraw its £8bn bid to acquire the 61% of Sky that it does not already own following cross-party pressure from MPs in the aftermath of the phone hacking scandal.

Asked yesterday about The Observer report, Cable admitted that there had been "heavy lobbying" over the proposed takeover, but attempted to play down any notion of bullying by News International.

"Well, there was heavy lobbying but it was perfectly legal," the minister told BBC One's The Andrew Marr Show.

"I don't want to dwell on the past and my own role in it - what I do want to focus on is reforming the system of competition and takeovers as it applies to the media, so we have a healthier, more plural system in future."

Over the weekend, the Sunday Mirror was dragged into the phone hacking scandal after evidence of possible criminal behaviour at the newspaper was uncovered by Newsnight.