The Evening Standard and Independent have asked the government not to investigate the news outlets’ Saudi Arabian investors, saying the UK media industry could become financially unsustainable if officials probe the source of the offshore investments.

Last week the culture secretary, Jeremy Wright, raised concerns that the investments, made through Cayman Islands companies controlled by a previously unknown Saudi banker, could hide a financial backer with “strong links to the Saudi Arabian state”.

The government also said this sale of 30% stakes in the free London newspaper and its online-only sister title “may have an effect on the Evening Standard and the Independent’s news agendas”. Both outlets are controlled by Evgeny Lebedev, son of the Russian oligarch Alexander Lebedev, while the Evening Standard is edited by the former Conservative chancellor George Osborne.

Evening Standard and Independent could face inquiry over Saudi funds Read more

ESI Media, which operates both titles, responded to the government on Monday. It did not dispute the government’s claim that its investors had close ties to the Saudi state, but said it remained editorially independent. It said there was no justification for the government to investigate the deals, and claimed such action could harm its financial future.

A spokesperson said: “We have explained why there is no proper legal basis for an investigation into these transactions, which we believe would be counterproductive and detrimental to the health and stability of the UK media landscape.

“We have nothing to fear from an investigation, but regard it as an unnecessary and expensive distraction, which could have a devastating effect on any future investment needed for the wider industry’s sustainability and growth.

“Our media outlets are firmly committed to the accurate presentation of news and freedom of expression. Our editorial record speaks for itself. We uphold these values proudly, reflecting the trust the public places in us. We know that this trust is important – and all the more so in the current political climate. Our editorial policies, guidelines and reporting reflect these standards, as we have again reiterated to the secretary of state today. We have no further comment to make at this point.”

The government will make a final decision on whether to a launch a full investigation into the Saudi investment by the end of the month.

The dire financial state of the UK media industry has raised concerns that prestigious British news brands could be influenced by the availability of money from overseas, especially from Gulf states involved in a Middle Eastern proxy war, spending millions on lobbyists and soft power campaigns.

Last year Lebedev accompanied an Evening Standard reporter on a tour of war-torn Yemen along with Saudi-backed troops, posing for pictures on his personal Instagram account.

The Independent has already launched a series of foreign-language sites using its brand, which are controlled and operated by Saudi Arabian journalists and aimed at readers in the Middle East.

Saudi Arabia has a historically poor record for journalism and freedom of speech. It was ranked 169th out of 180 countries in the 2018 World Press Freedom Index, while last year the Saudi government was implicated in the murder of the journalist Jamal Khashoggi in its own consulate.