The Foreign Office has been accused of attempting to block an official investigation into the takeover of The Telegraph by an Abu Dhabi-backed organisation.
Lucy Frazer, the culture secretary, has said that she is minded to open a regulatory investigation into whether the bid by RedBird IMI would be against the public interest.
The Telegraph and the Spectator magazine were previously controlled by the Barclay family. However, the family lost control of the titles in June because of £1.2 billion in overdue loans to Lloyds. They are trying to repay those loans with money from RedBird IMI.
Frazer’s department has written to Lloyds, the Barclay family and RedBird IMI signalling that she will issue a public interest intervention notice, which would prompt regulators to investigate.
However, the Foreign Office is said to have expressed reservations to the government over the potential diplomatic fallout, given the key role of the United Arab Emirates in the Middle East.
The RedBird IMI bid is being advised by a consultancy run by the former head of the Foreign Office. Sir Simon Fraser, who was the permanent under-secretary of the Foreign Office for five years, is supporting the Middle Eastern bidder through his Flint Global advisory firm.
Read more: thetimes.co.uk