The late playwright, Dennis Potter, would not know whether to be disgusted or appalled.

He so loathed the media baron, Rupert Murdoch that he called the cancer which killed him Rupert.

Now a Labour government has given Murdoch the right to add a terrestrial television channel to a media empire which already stretches from the satellite to the Sun.

He hadn't said formally whether he was putting in a bid and even if he did, there would be a new super quango, called OFCOM, which could prevent him from becoming too powerful.

Jeremy Paxman discussed how far Rupert Murdoch will he be able to increase his dominance of the media in this country with the Culture Secretary.

Watch the interview

JEREMY PAXMAN:
Did you really go into politics so someone could write on your tombstone "She made the world safe for Rupert Murdoch?"

TESSA JOWELL:
Jeremy, I went into politics for many things, perhaps most of all to make the world a more equal place, and the digital revolution has enormous possibility for making the world more equal. Extending into poor communities, better communications, access to facilities that they have never had before, so that's why I went into politics.

JEREMY PAXMAN:
And benefiting Rupert Murdoch potentially?

TESSA JOWELL:
The package of proposals, that we have announced today, are proprietor neutral, you could make precisely the same case with all the fun and furore you have just had in your film about the Daily Mail and General Trust, about Trinity Mirror, about Viacom, about Vivendi, AOL Time Warner, all these are large companies, the first three, are press media companies, newspaper companies, in this country, who are either at the point of exclusion of being able to buy into terrestrial television, or just above it. But AOLTime Warner, Liberty Media are American companies, that with lifting the ban on foreign ownership, would be able to invest in British media.

JEREMY PAXMAN:
Your guiding premise appears to be that we need less regulation?

TESSA JOWELL:
That we need more competition. We need more competition, less regulation but we do need regulation because the media is different from the other sort of commodities on which competition policy will bear.

JEREMY PAXMAN:
Don't you think there is any connection the between the fact we have the least worst television in the world, and some of the more heavily regulated television?

TESSA JOWELL:
I think that we need regulation to protect plurality and diversity. You're absolutely right, the standards of our television, particularly of our public service broadcasters, are among the best in the world and we want to keep it that way.

JEREMY PAXMAN:
Yes, but what you're doing is making it easier for people to operate at other levels, you're seeking to remove forms of regulation?

TESSA JOWELL:
We are certainly going to do that, but remember the digital revolution will do that anyway. There are already more than 150 digital channels available in this country, the provisions of the Ofcom¿

JEREMY PAXMAN:
..That's a good thing is it?

TESSA JOWELL:
Well, it's a consequence. If you want to watch lots of television, there is more and more television for you to watch, but the provisions in the Ofcom Bill very particularly define public service broadcasting and their responsibilities for the first time, and we see that as a very important way of preserving the quality of British television.

JEREMY PAXMAN:
Why have you not brought the BBC under Ofcom when it comes to regulating programme quality?

TESSA JOWELL:
In a number of very important respects, the BBC will be under Ofcom.

JEREMY PAXMAN:
In terms of programming?

TESSA JOWELL:
Well, not in terms of programming, but in terms of the general standards that apply to all broadcasters, in terms of the quantitative measures, independent production, regional broadcasting, the standards will be set by Ofcom, and for the BBC and other public service broadcasters it will be regulated.

JEREMY PAXMAN:
The BBC will be able to be fined by Ofcom?

TESSA JOWELL:
The commercial public service broadcasters could be fined in extremis, by Ofcom.

JEREMY PAXMAN:
What about the BBC?

TESSA JOWELL:
We are in discussion with the BBC and the regulators, about whether or not fines should be levied on the BBC.

JEREMY PAXMAN:
Why do you need to discuss with the people with whom fines may be levied, whether fines should be levied upon?

TESSA JOWELL:
Because, fining the BBC is different from fining one of the public service broadcasters. The BBC..

JEREMY PAXMAN:
The BBC is a public service broadcaster..

TESSA JOWELL:
But it is funded a different way. It is funded by licence payers' money, your money and my money, there is an argument for saying unlike the commercial broadcasters, whose fines would be paid from advertising revenues to the treasury, there is an argument for saying licence payers' money shouldn't be taken out of the BBC, if BBC transgresses its permissions in various ways, and goes back to the treasury.

JEREMY PAXMAN:
Surely it remains public money, if its taken away a public body, doesn't it?

TESSA JOWELL:
This is one of the things we are going to look at in the course of examining the BBC agreement over the next few months but it is an issue, the issue at the heart of this is how do we create a level playing field between the BBC, with its system of regulation by the governors and the other public service broadcasters that will be regulated by Ofcom.

JEREMY PAXMAN:
Tessa Jowell, Thank You.

This transcript was produced from the teletext subtitles that are generated live for Newsnight. It has been checked against the programme as broadcast, however Newsnight can accept no responsibility for any factual inaccuracies. We will be happy to correct serious errors.