The Financial Times has today joined calls for the business secretary, Vince Cable, to investigate News Corporation's proposed takeover of BSkyB, arguing that there is a "clear public interest case for doing so".

In its leader column the FT, part of Pearson Group, which also owns book publisher Penguin and 50% of the Economist, argued that there is a "clear risk" that Rupert Murdoch's News Corp could "dominate the media scene, lock out challengers and stifle the diversity of debate".

The FT leader also refers to the News of the World phone-hacking affair, saying it raises "broader questions about Mr Murdoch's powerful grip on the UK media industry".

"News [Corporation] and BSkyB would be a truly formidable beast," said the FT. "Before Mr Murdoch seizes more territory, Mr Cable should call a halt to establish whether this [deal] really would serve the public interest. It is imperative that Vince Cable, the business secretary, examines the deal under British rules governing media diversity."

The FT cites the growing dominance of News Corp's UK media assets – the Sun, News of the World, the Times and Sunday Times account for 37% of national newspaper circulation while BSkyB accounts for 35% of TV revenues – noting that "in a few years' time BSkyB may have almost half the British TV market [in terms of revenue]".

Murdoch could drive other publishers out of business in a price war not seen since the 1990s with access to such massive financial resource, the paper added.

"A merger would give Mr Murdoch unfettered power to direct its management and cash flows," the paper said. "He could bundle his newspaper websites with Sky subscriptions, potentially giving him a big advantage as news migrates to an online subscription model. [The deal] would give Mr Murdoch substantial firepower to cross-subsidise his loss-making UK newspapers, enabling them to compete with rivals on price. Were Mr Murdoch to embark on fresh price wars, more rival newspapers would be marginalised – or even forced from the news stands."

The FT also raised concerns about the News of the World phone hacking scandal, which occurred when David Cameron's director of communications, Andy Coulson edited the paper, and the apparent lack of appetite by the police to fully investigate the claims.

"The allegations have gone beyond his [Coulson's] role to include troubling claims that the police did not thoroughly investigate the News of The World's activities because of their relationship with Mr Murdoch's papers," it said. "This has raised broader questions about Mr Murdoch's powerful grip on the UK media industry, and laid bare the extent to which British politicians are cowed by him and even fight shy from investigating alleged criminality."

Last week it emerged that Claire Enders, founder of media consultancy Enders Analysis, had sent a 20-page letter to Cable, the culture secretary, Jeremy Hunt, and the broadcasting minister, Ed Vaizey, expressing her concerns about News Corp's plans to take full control of BSkyB.

Enders, a respected commentator and analyst who has advised and worked for many of the UK's biggest media groups, said the proposed takeover represents a "Berlusconi moment" for the country. This is a reference to the Italian prime minister, Silvio Berlusconi, who owns Italy's biggest commercial broadcaster, Mediaset.

She argued that allowing the proposed deal to go through would represent "a reduction in media plurality to an unacceptably low level" and provided evidence to back up her claim.

News Corp is likely to formally register its proposed takeover of BSkyB with the European Commission in the next few weeks, triggering a process that could lead to intervention by Cable.

Cable's Department of Business, Innovation and Skills (BIS) will then have several weeks to decide whether to consider the decision on media plurality grounds.

Separately, the UK competition authorities can also investigate the deal. Cable will take advice from Ofcom before making a decision on whether to block the takeover. Competition issues will be assessed by the Competition Commission and Ofcom.

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