Murdoch said the "jury's out" on who will get his support

Mr Murdoch said he was concerned about more power being given up to Europe, and would see if the Tories "look like a viable alternative government".

The Sun, Britain's top-selling paper, has backed Labour since 1997, and many MPs think its support has been crucial.

But Labour MP Clive Soley said: "Papers can make a big difference... but overall they don't win elections."

A Labour party spokesman added: "With potentially two years to go before a general election and a new Opposition party leader, it is not surprising that [Mr Murdoch's papers] are taking stock of the political situation.

"We... are confident that when the next election comes the delivery of improved public services will mean that we deserve the support of News International readers."

'Desperate'

But former Sunday Times editor Andrew Neil said the Labour party would be worried about Mr Murdoch's stance, despite their outward relaxed appearance.

"Labour fought elections throughout the 1980s with the Sun dead against them and they lost them all," he told BBC News 24.

Let's see what the government is doing with Europe, lets see how Mr Howard performs, how the government performs Rupert Murdoch

"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. "

Mr Murdoch told BBC One's Ten O'Clock News "the jury's out" on whom he would back in the election, expected in about 18 months.

He said he had a "friendly relationship" with both Prime Minister Tony Blair, and with new Conservative leader Michael Howard.

"I would say that we'll have to see how the Tory front bench looks, if it looks like a viable alternative government which it hasn't so far."

But he added: "We will not quickly forget the courage of Tony Blair in the international sphere in the last several months.

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

"It's a long way away, let's see what the government is doing with Europe, lets see how Mr Howard performs, how the government performs."

Europe concerns

Mr Murdoch warned of the "great dangers" of the controversial new European Constitution - to which the government wants to sign up without a referendum.

"I don't like the idea of any more abdication of our sovereignty in economic affairs or anything else," he said.

Labour fought elections throughout the 1980s with the Sun dead against them and they lost them all Andrew Neil, former Sky chairman

"We'll have to see what's in the final constitution, if it's anything like the draft then certainly we'll oppose it."

BBC political correspondent 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 Sun has become slightly more critical of the Labour government since Rebekah Wade took over as editor at the beginning of this year.

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