In his smart suit, Blair Cottrell looked much the same as any of the other politicians, lobbyists and business figures who constantly roll in and out of Sky News’s Australian studios as fodder for its gruelling 24-hour news programming.

But Cottrell’s interview on the cable news channel last Sunday about Australia’s immigration programme sparked a political firestorm that threatens to undermine the position of Rupert Murdoch’s network as a respected news organisation in his country of birth.

Cottrell is a far-right extremist with a string of criminal convictions who has previously expressed admiration for Adolf Hitler and claimed to have manipulated women “using violence and terror”. He is also a vocal supporter of the British far-right activist Tommy Robinson. Last year Cottrell and two other men were convicted of inciting contempt and ridicule of Muslims after they made a video in which they beheaded a dummy with a toy sword outside a city council office.

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None of this, however, was made clear to viewers. Instead his interviewer, the former politician Adam Giles, gave Cottrell free rein to call for the reclamation of a “traditional Australian identity” by restricting immigration to people who are “culturally similar” to white Australians.

He urged a ban on migrants from predominantly black African countries, saying Australia should limit its migrant intake to white South African farmers.

“These people are not culturally similar to us,” he said of black Africans. “I don’t think white South African farmers are going to be ransacking homes, car-jacking, attacking police [or] chopping people up with machetes on the street.”

The backlash was immediate.

The multinational financial firm American Express pulled its advertising, stating that “recent content on the channel does not reflect our brand values”. It was followed by Huggies nappies, Specsavers opticians and, on Friday, the pharmaceutical giant GlaxoSmithKline.

At the same time, a minister in Victoria announced she was banning the broadcasting of Sky at train stations throughout the state. A former federal government minister quit as a commentator for the channel, saying the decision to broadcast the Cottrell interview was “another step in a journey to normalising racism and bigotry in our country”.

Sky’s position on Australian television screens has faced increasing scrutiny since it was wholly taken over by Murdoch’s News Corp in December 2016.

Like its UK cousin, Sky is Australia’s major cable news network. Its daytime programming is predominantly dedicated to breaking news, and the network hosts a long list of high-profile and respected journalists.

However, in Australia the channel has developed something of a Jekyll and Hyde character, becoming a dedicated home for provocateurs keen to make headlines in the crowded rightwing commentariat. Since the takeover there has been increasing talk of the “Foxification” of the network.

“When the sun goes down at Sky, weird things come out to play,” the media academic Margaret Simons said.

The Cottrell controversy followed an increasingly familiar pattern for the network.

Last month David Leyonhjelm – a pro-gun, pro-free-market senator – caused outrage after he suggested to fellow politician Sarah Hanson-Young should “stop shagging men”.

During a follow-up appearance on Sky he said said the senator was “known for liking men” and that “the rumours about her in Parliament House are well known”.

Facebook Twitter Pinterest David Leyonhjelm in the senate chamber of Parliament House. Photograph: Mike Bowers/The Guardian

Hanson-Young, a member of the leftwing Australian Greens, accused Leyonhjelm of “slut-shaming” her and has filed a defamation suit.

In both the Cottrell and Leyonhjelm cases the network apologised, while its senior journalists strongly criticised the conduct.

The Sky reporter Laura Jayes labelled Cottrell “a far-rightwing fascist”, while her colleague David Speers said it was wrong to have broadcast the interview.

Despite the apologies, Sky hosts many conservative commentators who regularly push the line of decency.

Its chief night-time ratings draw is Andrew Bolt, who last week wrote an article arguing that a “tidal wave” of migrants was swamping Australia, forming enclaves and “changing our culture”.

Facebook Twitter Pinterest Andrew Bolt’s opinion piece in the Daily Telegraph on 2 August. Photograph: Staff/The Guardian

Bolt regularly faces opprobrium for his views on immigration and Indigenous Australians. In 2011, he was found to have breached racial discrimination laws in two 2009 articles which implied light-skinned people who identified as Aboriginal did so for personal gain.

And there are others. Last year Sky was forced to sack Mark Latham, a former Labor party leader turned rightwing outrage merchant, after he made a string of controversial statements, including speculating about the sexuality of a high school student. However the critic of what he has described as Australia’s “Muslim problem” still appears as a guest on several of the network’s programmes.

Facebook Twitter Pinterest Mark Latham. Photograph: Dan Himbrechts/AAP

Last week the race discrimination commissioner, Tim Soutphommasane, said racial fear was being monetised by “sections of a fracturing media industry”; they were using racial controversies “as part of their business model” to grab attention and keep their audiences.

Peter Fray, a former editor-in-chief of the Sydney Morning Herald and now a journalism academic, said the channel had seen a space in Australia’s media market for rightwing commentary.

“I think what they’re tapping into is a relatively cheap strain of broadly rightwing commentary which has clearly gone too far with the Cottrell thing,” he said.

“Is that monetising racism? It’s a good question. I think you could make that argument, but I don’t think it’s deliberate. I think what’s happening is they are giving some presenters a free rein to do what they do best, or worst, and you’re seeing that play out.”

Simons, an associate professor in journalism at Monash University, is sceptical of how deliberate the strategy is at Sky.

“There’s certainly a pattern of behaviour here but I don’t think we should conclude that it’s some kind of conspiracy where the News Corp heads are sitting back and planning the Blair Cottrell thing, because it has been incredibly damaging for them,” she said.

“Frankly if they are doing it for that reason they’re failing because those programmes rate terribly.”

According to the Australian ratings agency, Oztam, Bolt’s programme is watched by about 31,000 viewers. The figures for Outsiders – the programme on which Leyonhjelm appeared – rose from 17,000 in 2017 to 29,000 in the first half of 2018.

By comparison, the Australian Broadcasting Corporation’s flagship nightly current affairs programme, 7.30, is viewed by about 600,000 people.

But that could be about to change. This week Sky announced a partnership with the regional broadcaster Win. The deal will mean Sky’s daytime news – and night-time commentary – will have a potential audience of 8 million across Win’s network covering most of regional Australia.

“It means people in those areas will get another competent national news service, but what impact the other Sky content will have on those regional markets we don’t know,” Simons said.

But, she added: “I imagine it would be a boreathon for most people.”