According to a report in the Independent on Sunday, subscribers to MySpace discovered that if they mention a rival site called YouTube, then the words were automatically deleted from posts. It also says that attempts to download video images from YouTube led to blank screens.

According to the IoS, 600 of MySpace's estimated 47m members complained and threatened to move to other community sites such as Friendster and Linkedin, and News Corp has responded by restoring the links.

The acquisition of MySpace by News Corp has already been dogged by controversy. As well as concerns about censorship, public shareholders of Intermix, owner of MySpace, complained that the deal struck by the company's directors significantly undervalued the share price.

But Murdoch is undeterred by the controversy and ploughing on with his strategy of heavy investment in online media.

Last week, Murdoch appointed Jeremy Philips, a 33-year-old former management consultant, to head its internet acquisition strategy.

News Corp has made a string of online acquisitions in the last 12 months.

In November, it paid £14.3m for Asserta Holdings, the owner of UK property website Propertyfinder.com. It has also bought videogame and movie website company IGN Entertainment, which owns GameSpy and Rotten Tomatoes, for $650m (£365m) and lifted its stake in Australian property website realestate.com.au to 51.5%.