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Knesset rounds on Bibi's paper

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The Knesset's approval of a bill this week that will outlaw free newspapers is being seen as a move to curtail the power of Prime Minister Benjamin Netanyahu.

The controversial bill will realistically apply only to Israel Hayom, the pro-Netanyahu paper owned by his major supporter and donor Sheldon Adelson, who also funds Republican campaigns in the US.

Labour faction chairman Eitan Cabel, who proposed the bill, has alleged that Israel Hayom sells advertisements at lower prices than its competitors to run them out of business. In addition, he has claimed that the newspaper owes its existence entirely to the funds it receives from Mr Adelson.

If the bill passes into law - the Knesset vote was a preliminary stage - it will require Israel Hayom to charge its readers at least half what its cheapest competitor charges.

Mr Netanyahu walked out of the vote muttering "this shames the Knesset".

The bill was signed by members of every coalition party except Likud.

In another sign of the ever-widening cracks in Israel's governing coalition, Environment Minister Amir Peretz resigned on Sunday, citing Mr Netanyahu's policies as the reason for his exit.

"Over the last few months, we have experienced an earthquake in every sphere - diplomatic, social and economic - and the prime minister, instead of navigating and finding solutions, is only looking to place blame," Mr Peretz said.

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