Satellite broadcaster BSkyB burst into the battle to control ITV yesterday, buying 17.9 per cent of the UK's largest commercial broadcaster and frustrating the ambitions of two rival suitors as they raced to finalise bids for the company.

The near-£1 billion (€1.47 billion) bet by the satellite broadcaster headed by James Murdoch, came as NTL, its cable television rival, was finalising a £5 billion-plus (€7.4 billion) bid for ITV. It also interrupted talks between RTL, the pan-European broadcaster, and Kohlberg Kravis Roberts about providing private equity financing for a rival approach.

Sky struck quickly in the market yesterday, acquiring the £940 million stake yesterday from US fund management groups Fidelity and Brandes, two of ITV's largest and longest-standing shareholders. It funded the purchase from cash and its existing credit facilities.

As ITV's largest shareholder, Sky would now be able to block either bid and could have a decisive voice in the future of ITV.

However, NTL said last night it would appeal to the UK and European competition authorities on the ground that Sky was acting to disrupt market forces.

Although Sky is allowed to buy up to 19.9 per cent of ITV, it may still have to pass a public interest test if it is deemed to have substantial control.

The media clout of Rupert Murdoch, Sky's chairman, may complicate the deal's political dimension, although analysts said Sky's decision not to seek a board seat may have been to reduce such concerns.

In a statement, BSkyB, said it had no intention of making an offer for ITV and intended to be a "supportive shareholder".

"BSkyB wishes to explore options to create value in the interests of both BSkyB's and ITV's shareholders. BSkyB believes that ITV is one of Europe's premier broadcasting and production businesses," Sky said.

"This acquisition of shares has taken place without the prior knowledge of the ITV board of directors, but BSkyB has today communicated to ITV's board its intention to be a supportive shareholder," the statement continued.

Despite paying 135p per share - almost 20p more than last night's closing price, Mr Murdoch said Sky saw "an exciting opportunity for long-term value creation".

The price is at the top end of analysts' expectations of what a bidder could afford to pay for ITV.

NTL and RTL would not comment on the impact on their bid plans, but an NTL spokesman said: "It is surprising that James Murdoch has spent all week pouring cold water on our deal only to spend just short of £1 billion contradicting himself."

BSkyB said the ITV share purchase would be funded from existing cash balances and its currently undrawn credit facility.

In a conference call last night, James Murdoch said: "Having watched the ITV situation for some time, we moved swiftly today. We are investing as a long-term and supportive shareholder of ITV.

ITV said it had noted the purchase and was looking forward to discussions with BSkyB.

ITV shares closed 0.9 per cent higher at 115¾p (171 cents) ahead of the announcement, while BSkyB fell 1.3 per cent to 537p (793 cents).