Australia's government said Tuesday it will conduct an inquiry into the country's media in the wake of a phone-hacking scandal surrounding the U.K. operations of News Corp. (NWS).

Prime Minister Julia Gillard agreed to the inquiry amid intense lobbying by the Greens party in Australia and the journalists union, which in July called for a probe into media ownership.

Australia's newspaper and print media market is dominated by News Corp.'s Australian unit News Ltd. and Fairfax Media Ltd. (FXJ.AU). Spokespeople for News Ltd. in Sydney were unreachable for comment. News Corp. is the owner of Dow Jones & Co., the publisher of The Wall Street Journal and this newswire.

"There is going to be a media enquiry but the details are yet to be announced," said a government spokesman.

Australia accounts for only a fraction of News Corp.'s annual revenue but is the homeland of the controlling Murdoch family. Rupert Murdoch is now a naturalized U.S. citizen.

The opposition in Canberra, led by Tony Abbott, immediately rejected calls for the inquiry.

"This looks like a naked attempt to intimidate the media," Abbott told reporters Tuesday.

-By Enda Curran, Dow Jones Newswires; 61-2-8272-4687; enda.curran@dowjones.com

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