Britain's government said Tuesday it was now prepared to give Twenty-First Century Fox the provisional go-ahead to buy Sky, subject to the sale of its Sky News channel.
If approved, it could pave the way for a dramatic bidding war with U.S. media giant Comcast.
Culture Secretary Matt Hancock said Fox's proposal to divest Sky News to Disney — or any other suitable buyer — was likely to be the most proportionate and effective solution to tackle any outstanding public interest concerns.
In addressing Comcast's rival bid for Sky, Hancock said he would not intervene.
Comcast submitted a competing offer for Sky in February, prompting Sky's independent board members to withdraw their recommendation of the offer from Fox — which currently owns 39 percent of the European pay-TV group.