The planned purchase of the Italian pay-TV company Telepiu by News Corp and Telecom Italia is to be investigated by the European Commission.

The Commission said the deal could create a "near-monopoly" in the Italian pay-TV market.

Media giant Vivendi Universal announced in October that it was to sell Telepiu for nearly 900m euros ($895m; �575m) to News Corp.

News Corp plans to merge Telepiu with its own Italian pay-TV operation Stream.

Monopoly worries

"The merger would create a near-monopoly in Italy since Stream and Telepiu are currently the only providers of pay TV in the country," the Commission said in a statement on Friday.

News Corp, together with its Italian pay-TV partner Telecom Italia, have put forward a number of proposals to ease the Commission's fears.

But the Commission hinted that the inquiry could take some time to complete, saying that an initial one-month inquiry would not be long enough to see if News Corp's offer "would be sufficient to remove... all competition concerns".

The Commission wants to look at the impact the deal might have on rights for football and films, and whether it would effect the telecoms market.

"We'll continue to co-operate fully with the Commission's investigation and hope it will be resolved as soon as possible," a spokeswoman for News Corp said.

Vivendi cash crisis 'over'

Talks between Vivendi Universal and News Corp over the sale of Telepiu dragged on for nine months.

At the time of the sale Vivendi was keen to sell off subsidiary assets in order to ease its debt burden.

But last week the French media group told investors that its cash crisis was now "over".

It said on Tuesday that it was continuing to lower its large debt mountain by selling assets, and that it expected to have raised 7bn euros by the end of the year.