BskyB -- in which Rupert Murdoch's News Corporation holds a 35-percent stake -- insisted that 30-year-old James Murdoch, whose appointment was announced late Monday, was the best man for the job despite limited top-level experience.

However shareholders' groups served notice that they had a lot of tough questions to put to BskyB, while stock market analysts warned that the company, which has only just returned to profitability, could have damaged its standing.

"I am absolutely satisfied that we have got the right person," said Norman St John Stevas, the BskyB non-executive director who led the search for a new chief executive.

James Murdoch, who has run his father's Asian network Star TV for three years but has little other corporate background, has been seen as most likely to replace the outgoing Tony Ball ever since his departure was announced in September.

This was despite warnings that a seemingly dynastic succession would alarm BskyB's other 65 percent of investors.

St John Stevas, a former Conservative government minister, insisted that Murdoch's parentage played no role whatsoever in his appointment, despite his father being BskyB's chairman.

If anything, James's candidacy was "influenced against rather than for" by this, St John Stevas said.

"One always longs for the outstanding candidate, and James Murdoch was the outstanding candidate," he told BBC radio.

"It was amazing when he came into the room, after five minutes every one of us on the committee was verging his way."

Nonetheless, BskyB is likely to face a hostile grilling from groups representing institutional shareholders as to why a relatively untested college drop-out is the best person to run Britain's 19th biggest company.

BskyB shares fell 1.13 percent to 656 pence after the widely expected decision was announced.

The Association of British Insurers, whose members represent 25 percent of Britain's stock market share holdings, said it did "have concerns over the appointment of a chief executive who is the son of the chairman."

Another group, the National Association of Pension Funds, has already called on its members to vote against the re-appointment of St John Stevas because it believes he can no longer be seen as independent.

Analysts also warned that investors could be scared off BskyB if it was seen as too under the thumb of News Corporation and the Murdochs.

"If News Corp can install a chief executive in this way, what happens if in the future it decides it wants to use Sky's cash flows for a venture that is in its interests but not necessarily in those of other Sky shareholders?" Asked Omar Sheikh, an analyst with stockbrokers Charles Stanley.

British newspapers agreed that the appointment smacked of attempts by Rupert Murdoch to start a media dynasty.

"It is true that James Murdoch has made a success of Star TV, but which other 30-year-old university drop-out and music label founder would get a crack at running Britain's biggest private media company?" Asked the Guardian in an editorial comment.

"BSkyB is not a family business but a publicly-listed concern," it added.

Rupert Murdoch himself owns two influential British daily newspapers, the Times and the Sun.

Before joining Star, James -- the youngest of Murdoch's four adult children -- dropped out of Harvard to set up a hip-hop record label and then jointly established Australian telecom firm One-Tel, which collapsed in 2001.

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