An inquiry into whether James Murdoch and BSkyB are 'fit and proper' operators of a broadcasting licence has been stepped up by the media regulator Ofcom.
A Freedom of Information request by the Financial Times showed that Ofcom set up a team in January known as 'Project Apple' to investigate evidence of phone hacking and payments to public officials at News International, the newspaper company where James Murdoch was until recently executive chairman.
The investigation was started in the wake of fresh revelations which have emerged from the Leveson inquiry into media ethics, as well as police inquiries and select committees.
The team of seven or eight staff members is assessing whether News Corporation, which owns 39.1% of BSkyB, could have its licence revoked as a result of the allegations.
James Murdoch, who stepped down as executive chairman of News International last week, is still the head of BSkyB, having taken over from his father Rupert Murdoch in 2007 after four years as chief executive.
The move would likely force James Murdoch to step down as chairman, or result in News Corp cutting its stake in the broadcaster.
The FT's FOI request showed that Project Apple was discussed at an Ofcom board meeting on 24 January, and was also discussed in February at another meeting.
Ofcom, which has an ongoing responsibility to assess owners of broadcasting licences, said in July that it was "continuing to gather and analyse" information arising from the phone hacking inquiry.