Fortune.com is reporting this as a “snub”. Richard Siklos writes today that, in the weeks while Rupert Murdoch was trying to keep his No. 2 Peter Chernin at News Corp, the mogul also had to accept his daughter Elisabeth’s decision to turn down a spot on the company’s board. That palace intrigue will now intensify the speculation following Chernin’s departure about who will eventually run the media conglomerate. And, judging from Siklos’ report, it’s looking like James Murdoch is the heir apparant even more now than ever. board as well. Murdoch continues to control the company through a 37% voting interest and keeps saying he wants a family member, or even more than one, to run it when he’s gone. Fortune says Elisabeth was in New York today as an “observer” at the company’s first board meeting since the announcement that Chernin was stepping down.

Siklos’ sources said that Elisabeth, known as Liz, was torn about joining the News Corp board. “On the one hand she has a sense of duty and is one of four grown Murdoch children who will one day inherit the family’s controlling votes. But she also has a conflict of interest with Shine, the big UK production company she has built up over nearly seven years. Under UK broadcast regulations, Liz Murdoch’s presence on the News Corp board would have rendered Shine illegible for the 25% of programming budgets that big British broadcasters like the BBC and Channel 4 are required to spend on independent production houses that have no links to broadcasters. Two people close to Murdoch said that this pool of funding represents a large proportion of Shine’s business, and that there are other advantages to being an independent producer that allow Shine to more easily retain the rights to formats it creates.”

In addition, being on the News Corp board would create a conflict for Shine because her father’s media giant controls British Sky Broadcasting, the big UK satellite TV business, as well as numerous Sky and Fox TV channels that air there. Liz Murdoch owns 63% of Shine and another big backer is Sony Pictures Entertainment, which has 20%. “If she had wanted to rejoin the News Corp board, Liz would have had to sever her ties with Shine, which presumably would have involved selling it, perhaps to News Corp,” Siklos wrote.

Liz had worked closely with her father for several years at News Corp in a senior role at BSkyB, but eventually quit in frustration in 2000 to be entrepreneurial and independent. Siklos adds, “Whether she is on the board or not, Liz is clearly beginning to play a larger role at News Corp. But that does not, insiders say, diminish the odds that James is the most likely Murdoch to one day succeed Rupert as CEO.”