Sky has been talking about a US service for some months and is understood to have held preliminary talks with cable companies about distribution.
The plans were being pushed forward by Nick Pollard, head of Sky News, who told The Observer newspaper: "For the moment, it doesn't look like it's going to happen. The plans were at a very early stage -- nothing has been decided."
Sky had been looking to launch a service following the success of its Gulf War coverage, where it beat BBC News 24. Sky News's reach was 6.3m, compared with News 24's reach of 3.7m.
The story mirrors the success that Fox News had in the US, where it beat traditional rival CNN. Fox News averaged 4.16m viewers each day, compared with CNN's 3.74m. Fox News has been the number one news network in the US for more than a year before the war started on March 19.
Fox has built a reputation in America as a Bush-backing, pro-war Republican station, which is favoured by owner Rupert Murdoch.
Fox News chief Roger Ailes is thought to have told Murdoch that if Sky News launched in America it could hit Fox's success.
However, with Sky News this seems unlikely, given the wildly differing kinds of station that the two are. Sky has none of the political bias that Fox has and has been dubbed "BBC Lite" by Murdoch.
Murdoch is in favour of Sky taking on some of the stronger editorialising that Fox has, but it is unclear how successful this would be in the UK market.
So keen on Fox is Murdoch that he has gone on record as saying that he is considering a UK version of Fox: "I might start a full British edition of Fox News as well as Sky News. I might cover radio as well."
Sky News executives are likely to be deeply disappointed by the shelving of plans to launch a US service, because what became clear during the war in Iraq was that while Fox's right-wing, gung-ho agenda was popular, there was also an appetite for something else.
The BBC enjoyed a very good war in the US as viewers turned in greater numbers than ever before to BBC news bulletins.
At its height, the BBC gained audiences of more than a million. Since the war finished, BBC bulletins have continued to be seen by around 900,000 people across 221 public broadcasting stations.
The BBC is understood to be in early stage talks with cable networks about a slot for BBC World, its international news channel. It follows the success BBC News enjoyed online with American surfers as they looked for foreign views on the conflict in Iraq.
BBC News was the 59th most-visited website in the US overall, beating established homegrown names -- including Murdoch's Fox News.
A spokesman for the BBC said recently: "We have always talked about 24-hour distribution as our long-term goal for BBC World in the US."
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