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However, Ofcom has not yet decided whether the situation equals a change of control at ITV, which could result in a review of ITV's programming obligations.

The decisions are a blow to Sky, which spent almost £1bn to hoover up 17.9% of the terrestrial broadcaster's shares in November.

Media observers saw the move as a tactic to block any possible acquisition of ITV by its pay-TV rival NTL, now Virgin Media.

The key issue is that the OFT has decided that the situation has or is expected to result in a "substantial lessening of competition".

It has reported its findings back to Alistair Darling, the Secretary of State of Trade and Industry, who asked the OFT and Ofcom to investigate in February and report to him by today.

Darling now has until May 26 to make a decision on whether to refer Sky to the Competition Commission.

John Fingleton, chief executive of the OFT, said: "We have concluded that this partial ownership link between two key players raises significant competition concerns.

"Sky's shareholding means that ITV is no longer fully independent, and this may alter the future competitive landscape, especially as we approach digital switchover.

"Given the high stakes for 10s of millions of UK consumers, we believe these risks for competition merit further examination."

ITV said: "ITV plc notes the statements today by the OFT, Ofcom and the DTI and awaits the Secretary of State's decision."

The OFT said no clear-cut remedies were offered to resolve its concerns.

Ofcom reported that its advice to the government is that "there are public interest issues, in relation to sufficient plurality of news provision for both cross media and television news in the UK".

A spokesman for Sky said: "Today's statements reflect the continuation of an existing regulatory process with which we will continue to engage fully.

"More than any other company, Sky has led the unprecedented expansion in choice and diversity of views available to British families. The number of channels has grown from four when Sky was founded in 1989 to over 400 today, spanning entertainment, arts, children's, news, sports and documentary genres.

"Sky believes in choice and competition and supports an environment that fosters investment and dynamism in today's fast-changing media landscape."

The focus will now switch to whether the government will act against Sky, given Murdoch's influence on politics and the media, and to whether Sky will pre-empt potential action by selling off its stake.

If it does so at ITV's current share price of 117.3p it will make a substantial loss, having acquired its shares at 135p.

ITV's share price rose 1.21% today to 117.3p, while Sky's share price dropped 0.44% to 566p.