In a blog post in today's Guardian, Roy Greenslade reports that The London College of Business (LCB) has instructed media lawyers to take against against the broadcaster.
Aired on March 29, the Sky News scoop claimed that Dr Javed Akhtar, supposedly a member of LCB's staff, had assisted foreign students to purchase qualifications that would enable them to obtain work visas to remain in the UK. The story was also posted on the Sky News website.
However, LCB issued a statement on its website saying that it "rigorously rejects" the allegations that Akhtar was employed by the college as a "marketing consultant", or that he had any contractual relationship with the firm.
LCB, based in Barking, East London, also said that it was unaware of any business cards being used by Akhtar claiming he held a position with the college.
A college spokesman told Greenslade that they were taking legal action "to send a clear message to the government, UK Border Agency and current and future students that they can have complete trust in the college's integrity".
He also claimed that Sky News has now amended its online article and removed the video report.
In a statement issued to Sky News when the report was aired, LCB said: "The College has always acted in a totally honourable and proper fashion in relation to its responsibilities as a Higher Education provider.
"The College is therefore entirely happy to cooperate fully and openly with any enquiry or investigation conducted by our validation body (the University of Wales) which may arise from the allegations and will act robustly in response to the outcome of such."
Sky News has not yet issued a statement on the potential legal action by LCB.
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