Britain's media regulator said on Monday it had launched an investigation into Sky News, the influential news channel of Rupert Murdoch's BSkyB, which has admitted twice hacking into emails to generate a story.

Sky News has said it sanctioned the practice because it believed the story was in the public interest, but the announcement by regulator Ofcom is likely to revive the issue, on the day the head of the channel goes before a judicial inquiry into media standards.

Ofcom is investigating the fairness and privacy issues raised by Sky News' statement that it had accessed without prior authorization private email accounts during the course of its news investigations, a spokesman said.

We will make the outcome known in due course.

Sky News said earlier this month that it had hacked into emails in 2008 but insisted it had acted in the public interest as it shared the information with police and helped to secure a criminal conviction.

The story involved was the bizarre case of the so-called canoe man who faked his own death after paddling out to sea. Sky News said the information it found was given to police and helped to secure the conviction of the man's wife.

The admission of hacking however was seen as potentially damaging to the successful channel as BSkyB is 39 percent-owned by Murdoch's News Corp, which has itself been convulsed by a phone hacking scandal at its British newspaper arm.

As a result, Ofcom is already looking closely at parent company BSkyB as to whether its owners and directors are fit to own a broadcast license.

Financial and media analysts said at the time that although the timing was unfortunate, they did not see the issue as causing any long-term damage to the company.

BSkyB declined to make an immediate comment but the head of Sky News, John Ryley has previously used his blog to say that he stood by his decision to give approval for the email hacking to go ahead.

As the Crown Prosecution Service itself acknowledges, there are rare occasions where it is justified for a journalist to commit an offence in the public interest, he said, when the hacking was made public earlier this month.

James Murdoch, who stepped down as chairman of BSkyB but remains on the board, will appear before the Leveson Inquiry into press ethics later this week, as will his father Rupert, to answer questions on their relationship with politicians.

Ryley will appear before the inquiry, which was ordered by Prime Minister David Cameron because of the News Corp phone-hacking scandal, later on Monday.

Ofcom said it would examine the Sky News email hacking under rule 8.1 of the broadcasting code which deals with privacy issues. However, the code does state that any broadcaster wishing to justify an infringement of privacy must demonstrate why it would be warranted.

Examples given include areas where public interest outweighs the right to privacy, such as when revealing or detecting a crime.

Ofcom wouldn't want to be in a position where it says we would allow a news editor to make a judgment of this kind any time they feel like it, media consultant Claire Enders told Reuters.

It will result in a slap on the wrists for John Ryley. We're not expecting anything serious.

(Reporting by Kate Holton and Georgina Prodhan; editing by Georgina Prodhan)

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