Jeremy Hunt referred News Corporation's £8bn bid for BSkyB to the Competition Commission, pushing it back at least six months, after Rupert Murdoch chose on Monday to withdraw his offer to spin off Sky News in order to get the media merger cleared by regulators.

Forty-five minutes before Hunt was due to get up and address MPs to update them on how he would handle the Sky bid, Murdoch's News Corp said it was "withdrawing its proposed undertakings in lieu of reference to the Competition Commission".

Without the undertaking – spinning off Sky News into a separately listed public company 39.1% owned by News Corp – Hunt will have no alternative but to refer the bid for BSkyB to the Competition Commission. That will take 24 weeks, although the Competition Commission has the option of a further eight weeks to evaluate the deal.

News Corporation said it would work with the Competition Commission if necessary. "Should the secretary of state for culture, Olympics, media and sport decide on this basis to refer the proposed transaction to the Competition Commission for a detailed review, News Corporation is ready to engage with the Competition Commission on substance," it said in a statement.

Speaking at 4.20pm in the Commons, Hunt told MPs that he would "now refer this [the bid] to the Competition Commission with immediate effect".

The Competition Commission now has the option to either clear or block the proposed takeover, or to propose remedies that would ease concerns about "media plurality". By opting to have the bid examined by the Competition Commission, News Corp loses control of determining its potential concessions; previously the company had, in effect, offered to spin off Sky News on a take-it-or-leave-it basis.

News Corp insiders said that while it had hoped to avoid a referral to the Competition Commission, its efforts had "clearly failed" and that the greater riskiness of going to the Competition Commission was nevertheless worth it because the regulator would focus on issues of "media plurality" – which means it would not take into consideration the impact of any further disclosures as regards phone hacking.

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