Australia's government has made an 'unprecedented' intervention in an official tender process to stop Sky News Australia, partly owned by Rupert Murdoch, winning a A$223m contract to broadcast Australia's overseas television service, the Sydney Morning Herald reports.

According to the article, an aggressive bid to expand Australia's presence in China helped push Sky News over the line in a fierce contest with the ABC to win the rights to the station, known as Australia Network.

An independent panel of public servants set up to evaluate the competing tenders saw Sky as the better bid - only for the government to baulk at stripping the contract from the publicly funded ABC to hand it to a company part-owned by News Ltd, Channel Seven and the Nine Network.

Sky News is broadcast on pay TV in Australia, including on Foxtel which included News Ltd as one of three owners.

Australia Network broadcasts news, drama and sport to 44 countries in Asia and the Pacific, as well as programmes to teach English language skills.

At present the ABC holds rights to broadcast the network, but the government put a new 10-year deal out to competitive tender in February with an outcome originally set for 2 May.

It is understood Sky News proposed setting up a dedicated channel for China to run separately from the rest of the network as a way of expanding Australia's reach there, where censorship restrictions limit foreign news broadcasts.