BSkyB told to cut ITV stake

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Business Secretary John Hutton has ordered Sky to sell-down the shareholding to below 7.5% to address competition concerns.

BSkyB now faces steep losses on the ITV stake after seeing the group's share price plummet amid concerns over advertising revenues.

The holding is now worth less than two-thirds of the £940 million originally paid in November 2006.

Sky confirmed it will have to make the £343 million write-down in its half-year results, due out next week. It is estimated that Sky's direct cash loss could total about £250 million.

The Government has agreed to keep quiet on how long Sky has been given to offload the shares in an apparent concession in the ruling.

It is thought that Sky pressed for up to 20 months to complete the share sell-off.

Six months is considered the typical timeframe given by competition watchdogs for share divestments, although ITV pushed for Sky to sell-down the stake within three months.

Sky now has until February 25 to appeal against the decision, which supports recommendations made last month by the Competition Commission. ITV said it "warmly welcomed" the ruling.

Analysts said attentions will now turn to which firms may be interested in buying Sky's stake, with the share sale thought to make ITV an attractive target once more for takeover.