RUPERT Murdoch's besieged media empire faces new scrutiny amid allegations surrounding its flagship US publication, The Wall Street Journal, and how it inflated the circulation figures of its Europe edition by secretly buying copies of its own paper.

The Guardian has reported that The Wall Street Journal channelled money through European companies which, in turn, bought thousands of copies of the newspaper for as little as 5¢ a copy. The papers were often on-passed to students.

In at least one case, involving a Dutch consulting firm, an agreement was apparently struck in return for favourable editorial coverage.

The scam inflated sales of the paper in Europe by more than 30,000 copies a day, according to The Guardian, deceiving advertisers about the true extent of the newspaper's readership.

It is not uncommon for newspapers to offer discounted copies to third parties to support sales, and both The Guardian and WSJ Europe said the UK Audit Bureau of Circulation had signed off on the program.