Star India, Rupert Murdoch's Indian operation, is reviewing whether to continue at all with the Star News channel in India with just a 26 per cent stake in the news business.

This is one of the options that the company brass is exploring following the recent visit of Star group chairman James Murdoch to India, which concluded on Friday.

Star was expected to arrive at a final decision by September 20 on whether it would continue with Star News, or offload 51 per cent stake to one of the Indian companies it was currently negotiating with, sources in Star said.

"What is being evaluated now is whether it makes any sense at all to continue with a critical business with just a 26 per cent stake. Considerable investments have gone into building the Star News brand but majority control is now expected to vest with someone else," the sources said.

Star is also weighing its options on whether it should sell its 26 per cent equity in its news content company, Media Content and Communication Services to an Indian company in case it decides to get out of the news business.

"Closure of the channel is a very remote possibility at this stage of our internal discussion. A final decision will be taken by the end of next week," the sources said.

Star has been embroiled in a controversy over the Indian shareholding structure of MCCS.

Star has been given time up to September 22 to get an Indian partner in MCCS in order to comply with recent government rules that require Indian shareholders to have at least a 51 per cent stake in any news uplinking venture.

MCCS' current ownership pattern is as follows: 30 per cent is held by advertising professional Suhel Seth, 25 per cent by DSP Merrill Lynch vice-chairman Hemendra Kothari and 4 per cent by lawyer Raian Karanjiwala, while Hindustan Times editor Vir Sanghvi, television personality Maya Alagh and actor Jeetendra Kapoor hold 5 per cent each in the company.

The media group has already received several enquiries from domestic media companies, as well as industrialists, who are understood to be keen on picking up a large stake in Star News' content company.

Aveek Sarkar of the ABP group is being seen as a frontrunner in acquiring the 51 per cent stake that is currently on offer, as is industrialist Nusli Wadia.

James Murdoch was in Mumbai for two days to take stock of his Indian news business.