Sky has threatened to shut down Sky News if it will help Twenty-First Century Fox's £11.7 billion takeover of the broadcaster.
It is reported by CNBC that if the Competition and Markets Authority (CMA) rules that the acquisition could have an adverse impact on the UK's plurality of media ownership and broadcasting standard, Sky could take the drastic step of closing down or selling Sky News.
Sky News is allegedly being run at a loss and if the merger is not approved, it could be sacrificed.
Sky said in a submission to the CMA that it "would likely be prompted to review [its position] in the event that the continued provision of Sky News in is current form unduly impeded merger and/or other corporate opportunities."
It also stressed that the CMA "should not in its assessment simply assume the continued provision of Sky News."
Fox owns 39 per cent of Sky as it stands and the acquisition of the remaining 61 per cent of shares has been opposed by many - leading to the CMA's investigation. If successful, the opponents claim, Fox would have too big a hold over the UK's media, with sister company News Corp also owning The Sun, The Times and The Sunday Times.
Twenty-First Century Fox also controls the controversial Fox News channel in the US.
Fox itself has also recently been linked with a bid by Disney to takeover much of its broadcasting and media assets, including the 39 per cent stake in Sky.