The proposed merger of Carlton Communications and United News & Media has been referred to the UK's Competition Commission.

The Trade and Industry Secretary, Stephen Byers, said it raised competition concerns.

The referral is not a total surprise. The £7.8bn merger agreed last year would create the UK's biggest commercial broadcaster, with six ITV franchises covering 65% of households.

"The parties to the merger are highly influential players in ITV," said Mr Byers.

"This is a very important area in which we all have an interest both for information and entertainment."

He added that the acquisition raised concerns both in respect of the market for ITV programming and the market for advertising.

Michael Green, chairman of Carlton said: "We look forward to putting our case to the Competition Commission with vigour and clarity."

Lord Hollick, chief executive of United, said the combination of his company with Carlton would strengthen ITV and lead to greater investment in programmes, free-to-air sports rights, pay television and online services.

When the merger was originally announced, the other major player in independent broadcasting, Granada, threw its hat into the ring.

It asked the Office of Fair Trading whether it would be allowed to bid for either company given the commanding position the merged group would have in ITV - a move known as pre-notification.

It had been expected that clearance of the United-Carlton deal would have triggered an immediate counterbid from Granada.

Separate ruling

However, observers think any bid might now be put on hold until after the Competition Commission inquiry - it will make its report by 16 May.

But it is likely that there will be a separate ruling on the consolidation of ITV before the report comes out.

That will give all the parties a clearer regulatory picture.

The OFT has been looking into guarantees given by the ITV companies that no one company would control more than 25% of advertising time.

A combined Carlton-United would have a 14.9% share of national audience and a 36% share of advertising revenues.