Mr Murdoch 's papers have backed Labour

The paper, which has backed Labour at the last two polls, has shown support for new Tory leader Michael Howard.

Mr Murdoch told BBC2's Newsnight the Sun would examine whether the Tories "looked like a viable alternative government".

But he said the newspaper would not forget Tony Blair's "courage in the international sphere".

"So we may be torn in our decision, but let's wait and see," he said.

He said the Tory front bench had not in recent years appeared a viable alternative to Labour.

In the interview Mr Murdoch warns of the "great dangers" if the UK signs up to the proposed European Union constitution.

He believes a referendum should be held over the constitution.

Europe concerns

That view is in line with Tory policy on the subject, with the government resisting calls for a poll.

Former Sky Television chairman and Sunday Times editor Andrew Neil said the Labour party would be worried about Mr Murdoch's stance, despite their outward relaxed appearance.

"Mr Blair has fought two elections with the Sun behind him. He won by a landslide in 1997, another one in 2001.

"Labour fought elections throughout the 80s with the Sun dead against them and they lost them all," he told BBC News 24.

"Mr Blair and those around him in Downing Street really think these papers are election winners or losers, which is why they are desperate to keep Mr Murdoch on side. "

One of the main issues that could sway Mr Murdoch was Europe, Mr Neil said.

"Murdoch hates the European constitution as much as he hates the euro, but there isn't going to be a referendum on the constitution, so they [Blair and Murdoch] have fallen out badly over that."

Mr Neil described Mr Murdoch as "instinctively much more of a Tory" than a Labour supporter.

"He has just felt that the recent Tory leaders... were never going to win so he couldn't support them.

Labour 'nervous'

"Now he thinks the Tories may have a leader who could win."

The BBC's Guto Harri said Mr Murdoch's comments would make Labour "very nervous".

He said Mr Murdoch was "in tune" with Mr Howard on a number of issues such as taxation and Europe.

The News International chief believes Mr Howard is a "credible" leader of the Conservatives, said our correspondent.

He said there was a "real danger" for Labour if Mr Murdoch's papers back the Tories.

This week the Sun dubbed Mr Howard "iron Mike" after his first appearance at prime minister's questions in the Commons.