21st Century Fox will be allowed to take over European pay-TV firm Sky as long as it divests Sky News to Disney or another company, British politicians have ruled.

The announcement, from British Culture Secretary Matt Hancock, is good news for Rupert Murdoch’s Hollywood studio and will now see it go head-to-head with rival Comcast for the prized pay-TV asset.

Hancock told the House of Commons, “I agree with the CMA that divesting Sky News to Disney, as proposed by Fox, or to an alternative suitable buyer, with an agreement to ensure it is funded for at least ten years, is likely to be the most proportionate and effective remedy for the public interest concerns that have been identified.

“As a result, I have asked my officials to begin immediate discussions with the parties to finalize the details with a view to agreeing an acceptable form of the remedy, so we can all be confident Sky News can be divested in a way that works for the long term… I am optimistic that we can achieve this goal, not least given the willingness 21st Century Fox has shown in developing these credible proposals.”

However, he added that if it can’t agree such terms that “the only effective remedy now would be to block the merger altogether. This is not my preferred approach.”

In January, the CMA dealt a blow to the bid, saying it was “not in the public interest.” However, Disney, which is in the process of acquiring the entertainment assets of Fox, soon stepped in, saying it would buy the Sky share to help get the $15B deal over the line. Fox also threatened to shut down Sky News, the biggest regulatory thorn in the company’s side, if it impeded “corporate opportunities”.

All of this comes as Comcast swooped in earlier this month to make a higher offer for Sky than Fox. The latter, aided by Disney, must now decide whether to make an improved offer for the satellite broadcaster.

The Culture Secretary added that Comcast’s offer for Sky will not require further regulatory investigation. “I have concluded that the proposed merger does not raise public interest concerns, and so I can confirm today that I will not be issuing an intervention notice,” he added.

“We welcome today’s announcement from the Secretary of State and are ready to engage in any discussions requested by the Secretary of State with respect to our undertakings,” said a Disney spokesman.