What wealthy people do with their media empires is contentious in all western democracies. Ownership is not just a source of private profit; it is a source of public power, a means to shape the world to suit one's interests. Politicians court editors and proprietors for the very good reason that they can deliver votes and move opinion.

Which is why most democracies have developed complex rules about media ownership. Britain, dumb to its importance, has the lightest of touches. We impose no nationality requirement; we do not tightly police the share of any media market held by one proprietor, nor make demands about limiting owners' power to take ownership chunks across the media domains; we do not even care much about preventing market dominance. The assumption has been that lightly applied competition law, along with self-regulation, is all that is required, with little thought for any political and cultural consequences. It is, I submit, the attitude of a declining civilisation that is losing its pride and sense of national purpose.

Thus nobody turns a hair at the Independent titles, along with London's only evening newspaper, being owned by a Russian oligarch with alleged links to the former KGB. Richard Desmond, who made his fortune in pornography, can extend his media ownership from the Express titles to Channel 5 with no objection. The Barclay brothers, owners of the Telegraph titles, are domiciled in the Channel Islands. And most famously of all, Rupert Murdoch's News International (NI), already the dominant force in the British newspaper market, is emerging as the dominant actor in British television as well, courtesy of Sky, for which he is now bidding for complete control.

The only other country that approaches this extraordinary attitude to the nexus of media ownership and power is Italy – with baleful results.

Professor Manuel Castells, the great student of the new media age, analyses the emergence of "infocapitalists" who build self-reinforcing networks of business and political power by owning the production of information and knowledge. Silvio Berlusconi is the most important – the infocapitalist-cum-prime minister who shapes the law to accommodate the rise of his business empire and then shamelessly uses the consequent power to rally opinion behind his party and run slur stories on political opponents.

Bien pensant opinion in Britain shakes its head, believing such blatant self-interested use of media power could not happen here. But it could and it does. NI has no less cross-media power than Berlusconi's Mediaset, and while its owner is not an active politician it has become the principal playmaker in the British political and media scene, pursuing interests from regulation to who gets to govern. This is the context in which to understand the mounting crisis faced by Andy Coulson, the prime minister's press secretary, over the potential extent of illegal mobile telephone-tapping into the voicemails of the famous while he was editor of the News of the World, the flagship Sunday tabloid of the News International stable.

Today, the New York Times magazine publishes new evidence from journalists on the paper during Coulson's editorship insisting that mobile phone-tapping was extensive, as initial Scotland Yard inquiries suggested, but which NI has consistently denied. NI argues that it was confined to former royal reporter Clive Goodman, who spent some months in prison for the offence which triggered Coulson's own resignation. Last week, another reporter on the paper was suspended, again, we believe, for suspected telephone-tapping. Coulson has consistently said he knew nothing of more tapping beyond Goodman's and refuses to comment further.

There is the usual criticism that, at the very least, Coulson is exposed as having poor judgment: if he didn't know about it, he should have. By inference, the same charge supposedly sticks to his boss, David Cameron. But Cameron is obliged to accept his press secretary's word, unless there is the strongest of proof otherwise. Coulson is not just good at his job, he has the advantage of having an extensive network inside NI, Britain's most powerful infocapitalist. This is the Berlusconi effect, British style. It is not a pretty sight.

Even if the telephone-tapping was as isolated as NI and Coulson claim, what is on the record was conducted with astonishing impunity. Editors knew there would be little comeback. The Press Complaints Commission, whose investigation into the affair was embarrassingly and inevitably limp, constituted no threat. Moreover, NI has a large cheque book. More ominously, the New York Times has spoken to detectives at Scotland Yard who believe that the Met did not want to take its investigations any further beyond Goodman; nobody wanted to get on the wrong side of NI.

While Labour in opposition is highly exercised over the affair, in government it was beyond feeble. The former home secretary Alan Johnson may now want the police investigation reopened; in office, he no more wanted to offend NI in the run-up to an election than the Met. Tessa Jowell says her phone was mysteriously tampered with 28 times. Why no action when in power?

NI is ambitious to shrink the BBC, entrench Sky's power into a de facto monopoly, further to make itself the arbiter of British politics while using the profitability of its UK operation to support its global ambition. David Cameron has privately and passionately assured at least one top TV executive I know that he is not in Murdoch's pocket, but he also does not want to lose his press secretary. Nick Clegg and the Lib Dems have a golden opportunity. They should not add to the firestorm over Coulson unless he is clearly guilty, but insist as a quid pro quo upon the establishment of a media commission, along the lines of the banking commission (one of the Lib Dems' and Vincent Cable's best achievements) to examine Britain's media ownership and competition rules. A plural and diverse British media, underpinned by a strong BBC, should be at the heart of Lib Dem thinking and policy.

Intriguingly, not one Labour leadership candidate has called for such a commission, nor spelled out how they would deal with infocapitalism and private media power. Clegg could show his critics that the coalition does have a liberal dimension, that he is not Cameron's stooge and contrast his stance with Labour's chronic temporising.

Who will defend Britain from its Berlusconisation? Just now, the Lib Dems may be all we have.