COPENHAGEN (Thomson Financial) - British Sky Broadcasting Group PLC unit Sky Radio has been ordered to pay 210 million Danish crowns to the Danish government for breach of contract, a Danish court said, announcing the verdict of the case.

Sky Radio, whose parent company is based in the Netherlands, had obtained at an international auction in 2003, authorisation to open a fifth radio channel in Denmark before withdrawing from the market in November 2005, as it was not making a profit.

Sky Radio initially agreed to pay the Danish government an annual concession tax of 54 million crowns for eight years, totaling 432 million crowns.

Until it withdrew from the market, Sky Radio had paid 108 million crowns. The radio channel then refused to pay the remaining 324 million crowns, arguing that the Danish government had not kept its promise to allow it to cover the whole country.

Sky Radio said its programmes were only properly received by half of the population.

The judge denied this, saying that as a professional radio channel, Sky Radio should have clarified the issue of the extent of its coverage, and had the opportunity to do so before the auction.

In the lawsuit, the Danish government is now demanding to be paid 210 million crowns, and not the unpaid amount of 324 million crowns, after deducting the profits made from the sale in 2005 to the Danish channel TV2 of the bandwidth left vacant by Sky Radio.

Sky Radio has appealed against the verdict.

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