Commenting on the “diversity test” in the media reform plan that allows mergers as long as there are at least five media operators in mainland state capitals and four in other regions, DMG’s Paul Thompson said the new test would reduce diversity in capital city markets.

In today’s AFR he is quoted as saying: “Five voices in each capital city is clearly not enough. In Sydney, for example, two of the voices could be solus radio stations such as 2KY and 2SM and the other three could be mega media groups.”

He says the government should have opted for “significant” voices rather than “a voice of any size of relevance.”

Austereo chief executive Michael Anderson says he is broadly “supportive” of the overall plan but warned new digital television channels must not be allowed to contain radio look-alike services saying: “We would want to make sure that they can’t just become radio channels.”

Senator Coonan has failed to persuade some Nationals that the ownership changes will not lead to a merger free-for-all in the bush.

The influential chairman of the coalition’s backbench communications committee Queensland Nationals MP Paul Neville said he did not support one owner controlling a TV network, radio station and newspaper in a regional city. He tells the AFR: I think it would be totally unjust for one proprietor to own all three. It would not be healthy and it’s anti-competitive.”

Mr. Neville says he opposes letting the Australian Competition and Consumer Commission have the power to allow this and said there should be legislation instead to ensure what mergers would not be allowed. “I will always favour legislation over interpretation”.

The comments set up a battle with Senator Coonan and Nationals leader Mark Vaile over the policy.

Mr. Neville said: “The devil will be in the detail.”