LONDON—The U.K. government has all but given Rupert Murdoch’s 21st Century Fox Inc. permission to partake in a bidding war for British pay-TV giant Sky PLC, clearing one of the last obstacles for a corporate takeover battle that also includes Walt Disney Co. and Comcast Corp.
British Culture Secretary Matt Hancock earlier this month indicated he would approve Fox’s $15 billion bid to buy the 61% of Sky it doesn’t already own, on the condition that Fox sell Sky’s news channel if its bid succeeds. On Tuesday, Mr. Hancock said...