THE Gillard government has made an extraordinary intervention in an official tender process to stop Rupert Murdoch's part-owned Sky News Australia winning a $223 million contract to broadcast Australia's overseas television service.

An aggressive bid to expand Australia's presence in China helped push Sky News over the line in a fierce contest with the ABC to win the rights to the station, known as Australia Network.

Rupert Murdoch at the launch of a Chinese TV station earlier this year. Credit:Reuters

An independent panel of public servants set up to evaluate the competing tenders saw Sky's as the better bid, only for the government to baulk at the prospect of stripping the contract from the publicly funded ABC to hand it to a company part-owned by Mr Murdoch's News Ltd, Channel Seven and the Nine Network. Labor then made late changes to the tender rules, sidelining the role of the independent panel and throwing the legitimacy of the process into doubt.

Australia Network broadcasts news, drama and sport to 44 countries in Asia and the Pacific, as well as programs to teach English-language skills, targeting the emerging middle-class audience in the region.