James Murdoch has warned the UK government that News Corp could move overseas if the regulator blocks its £7.8 billion ($12.5 billion) bid for BSkyB. News Corp’s European and Asian boss made the veiled threat talking to investment bank analysts in Barcelona. The government must decide whether it wants to risk “jeopardising an £8 billion investment in the UK” with a prolonged investigation, Murdoch said, noting that News Corp could relocate some of its most innovative projects to more “welcoming” countries if the UK blocks its bid for BSkyB. “From India to Italy and to Germany, countries are becoming more welcoming of investment and more welcoming of what we can bring,” Murdoch said.

Vince Cable, the Business Secretary, has referred News Corp’s bid to take 100% control of the broadcaster to Ofcom, the UK equivalent of the FCC, on grounds that the deal would give Rupert Murdoch’s media giant too much control of British media. Murdoch said he didn’t think the grounds for the medial plurality investigation are very strong. The Competition Commission in Brussels is also investigating News Corp’s bid to own the 61% of BSkyB it doesn’t have. Murdoch poured cold water on speculation that Brussels could tell News Corp to sell off Sky News if it wants the deal to go through. He said it would be “dramatically premature to be commenting on theories that have not even surfaced yet”. Any decision is not expected until the middle of next year. News Corp’s shares have risen to 726p this morning in the wake of Murdoch’s warning.

Media analysts I’ve spoken to say they don’t think Murdoch’s warning that jobs may go overseas will have any effect on Ofcom’s investigation. “BSkyB and News Corp execs including James Murdoch are always very aggressive about any regulatory actions and usually just as dismissive. This is the normal approach,” says analyst Claire Enders, whose Ofcom submission is thought to have swayed Cable. “It doesn’t have any bearing on the specifics of Cable’s referral. What Murdoch’s saying is that unless you let us do what we want to do, there’s a risk we’ll go and do it somewhere else,” Steve Hewlett, presenter of the BBC’s Media Show tells me.

Murdoch’s press handler was downplaying his remarks this morning. “It was in no way a ‘threat’,” she told me.

Meanwhile, Sir Michael Lyons, chairman of BBC regulatory body BBC Trust, says Director General Mark Thompson was wrong to add his name to the list of media companies including Channel 4 warning Vince Cable over the News Corp/Sky takeover. “He shouldn’t have signed that letter without discussions with the Trust,” Lyons told BBC News this morning. Thompson has been criticised for undermining the BBC’s impartiality. Thompson has subsequently apologised. Lyons was vague as to whether the BBC Trust supported Thompson’s stand though. “What the current debate has revealed is that BSkyB has bigger revenues than the BBC. It’s up to the regulator to decide whether that’s appropriate,” the BBC Trust chairman said.