Campaigners expressed disappointment but not surprise after media regulator Ofcom found BSkyB "fit and proper" to continue broadcasting today despite its major shareholder's involvement in the phone hacking scandal.
The review of Sky was carried out after Rupert Murdoch's News Corporation was forced to shut its News of the World newspaper in the wake of allegations that journalists had hacked the phone of missing schoolgirl Milly Dowler.
The firm also owns a 39 per cent stake in BSkyB and Mr Murdoch's son James (pictured) was chairman at the broadcaster before he stepped down earlier this year.
Ofcom concluded that Sky was "fit and proper to hold its licence," but was critical of James Murdoch's conduct in his role as chief executive of News International.
The watchdog said there was no evidence that James Murdoch knew of widespread wrongdoing at the News of the World or that he was complicit in a cover-up.
However as a company director it considered "James Murdoch's conduct, including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged."
Labour MP Tom Watson told BBC Radio 4's Today programme he was "disappointed" by the finding.
Asked if it was a finding he accepted, the MP for West Bromwich East said: "Yes, of course. I am disappointed by it obviously, but not surprised, but I do think it shows the flaws in Ofcom's methodology, they can't do deep investigations in the way that other organisations can and they also do hedge their bets."
Granville Williams of the Campaign for Broadcasting and Press Freedom said it was sad that Ofcom had "missed an opportunity to send a clear message."