Rupert Murdoch's News Corporation has accused the BBC of "gross misrepresentation" over the Panorama documentary alleging that its former subsidiary NDS was involved in helping computer hackers to undermine ITV Digital.

Chase Carey, News Corp's chief operating officer and Murdoch's right-hand man, said in a statement issued early on Thursday that Monday's Panorama had "presented manipulated and mischaracterised emails to produce unfair and baseless accusations".

"The BBC's Panorama programme was a gross misrepresentation of NDS's role as a high quality and leading provider of technology and services to the pay-TV industry, as are many of the other press accounts that have piled on – if not exaggerated – the BBC's inaccurate claims," Carey said.

"Panorama presented manipulated and mischaracterised emails to produce unfair and baseless accusations. News Corporation is proud to have worked with NDS and to have supported them in their aggressive fight against piracy and copyright infringement."

News Corp also on Thursday published a letter to Panorama from NDS executive chairman Abe Peled, accusing the BBC current affairs programme of having "seriously misconstrued legitimate activities" the company undertakes in running its encryption business.

NDS, based in Staines near Heathrow, plays a key role in Murdoch's global media empire. It provides the encryption technology that enables BSkyB and News Corp's other pay-TV businesses around the world to issue subscribers with set-top boxes and conditional access cards that allow them to watch channels they have paid for.

Earlier in March it was announced that NDS would be sold to Cisco for $5bn by its joint owners, News Corp and private equity firm Permira. NDS also works with other companies and now supplies encryption software to a third of the world's pay-TV operators.

Monday's Panorama broadcast allegations linking NDS to the pirating of conditional access cards for ONdigital, giving viewers free access to channels operated by the pay-TV rival to BSkyB, which was owned by ITV companies Carlton and Granada. ONdigital, rebranded ITV Digital, collapsed in 2002.

The Panorama claims were based on allegedly incriminating emails and interviews with two people apparently involved, a German hacker who said he cracked the ONdigital codes and the operator of a piracy website who said he distributed the codes to other pirates to manufacture counterfeit conditional access cards.

Both alleged that they were recruited on NDS's behalf by Ray Adams, then its head of UK security.

Peled, in his letter to Panorama representative Alistair Jackson, accused the programme of a "flagrant disregard for the BBC's broadcasting code, misleading viewers and inciting widespread misreporting".

He said the programme had featured "manipulated emails", mischaracterised and taken them out of context.

"You have used footage to falsely demonstrate your allegations that we sent certain emails externally to facilitate piracy when in fact the email was sent internally as part of our anti-piracy work," Peled said.

"This has helped paint a picture for your viewers that is incorrect, misleading and deeply damaging to my company and our sister company News Corporation. We demand that you retract these allegations immediately."

Peled added that he understood that the "manipulated and mischaracterised emails" may have been provided by a third party, "but this does not excuse your ethical and journalistic obligation to present us with your intended allegations prior to broadcast".

Separately, Australian officials said on Thursday they are not investigating claims by the Australian Financial Review that News Corp promoted piracy in order to cripple its competitors.

"If there's any evidence of that, then the Australian Financial Review should put it to the federal police, but we have not made a reference, the police have not received a reference," the Australian communications minister, Stephen Conroy, said.

A federal police spokeswoman confirmed the agency had not launched an inquiry into the claims.

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