Fox told the UK Government it was fit to complete its proposed takeover of Sky while colluding with Donald Trump to publish fake stories about a murdered US Democrat, a lawsuit claims.
Investigator Rod Wheeler is suing for defamation, claiming Fox News fabricated quotes implicating murdered Democratic National Committee staffer Seth Rich in the WikiLeaks scandal, while co-ordinating with the Trump administration on the story.
His lawsuit, filed on Tuesday in New York, lays out an explosive tale of Trump allies conspiring to push a false story to take the pressure of the Russian collusion investigation off the president.
It also alleges Fox News was willing to show the president its story before it was published - but all the while owner Rupert Murdoch's team were convincing Parliament to allow 21st Century Fox to take over Sky.
Rupert Murdoch's 21st Century Fox told the UK Government it was fit to complete its proposed takeover of Sky while colluding with Donald Trump
Investigator Rod Wheeler is suing for defamation, claiming Fox News fabricated quotes
A paragraph of the lawsuit says: 'At the same time that Fox was helping the Trump Administration divert public attention away from the Russian hacking scandal, Fox Executives were testifying oath before British regulators about how equipped the Company is to control Sky plc, the British media conglomerate.'
Last week, Karen Bradley revealed she was 'minded' to order a full review of Rupert Murdoch's bid to take full control of Sky amid concerns about his influence over the news agenda.
The Culture Secretary said a damning initial report by Ofcom raised 'persuasive' concerns about the 'influence' the Murdoch family would have over the political process if the deal goes ahead.
She said this meant she was 'minded' to send 21st Century Fox's £11.7billion buy-out of the broadcaster back to regulators for a 'phase two' review.
In a statement, Fox said it was 'disappointed' at the prospect of further delay but vowed to press ahead and close the deal by June 30 next year.
His lawsuit, filed on Tuesday in New York, lays out an explosive tale of Donald Trump allies conspiring to push a false story
What happened in 2010?
An investigation was launched the last time Rupert Murdoch's organisation wanted to take over Sky because News Corp, 21st Century Fox's then parent company, owned the Times and the Sun.
Now, the newspaper assets and the film and television studios are two separate companies, meaning technically there are no longer concerns about media ownership in the UK.
But, because both companies have the same owner, there may still be concerns raised.
The 2010 deal ultimately collapsed for political reasons linked to the phone hacking scandal, not because it fell foul of regulators.
Why are people concerned?
As part of its role, Ofcom must ensure that holders of broadcast licences are 'fit and proper' - and some politicians and campaigners have questioned whether Murdoch and his family fit the bill since the phone-hacking scandal exploded in 2011.
Murdoch has held a unique position in Britain in years