Sky is one of more than 10 companies believed to be interested in buying the business, which has 1.8m customers. OneTel was put up for auction for £300m by owner Centrica last month.
Other companies believed to be in the running are telecoms group Cable & Wireless, Carphone Warehouse, and private equity companies Apax Partners and Blackstone.
Murdoch is said to be under pressure to offer triple-play services --television, broadband and telephony -- to compete with NTL and Telewest which merged last month.
The new £6n cable giant now has the might to take on Sky, offering what it claims is the UK's leading triple-play bundling over a single line. In addition, its new cable footprint covers over 50% of UK households with an estimated 5m subscribers.
Sky is still leading the market with 7.8m subscribers and is on track to meet its target of 10m by 2008, but it looks like the gap could close if more customers are attracted by NTL/Telewest's offering.
Adding fuel to the reports is Sky's proposed £1bn bond issue, which analysts believe will be poured into telephony and broadband in the wake of the merger.
Sky also has a personal interest in OneTel because James Murdoch's brother Lachlan part-owned the company before Centrica acquired the UK assets in 2001.
Centrica refused to comment on the deal and Sky was not immediately available for comment.
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