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* New media (Berlin: 4NM.BE - news) watchdog does not mean more censorship-report

* New council would cover all media platforms

* Murdoch's News Ltd rejects watchdog recommendation

* Wider reviews on media convergence, ownership under way (Updates with more detail, News Ltd and political reaction)

CANBERRA, March 2 (Reuters) - An Australian inquiry sparked by concerns about journalistic practices at Rupert Murdoch's News Corp on Friday recommended a new government-funded body to set and enforce standards across the country's tightly owned media.

Murdoch's local arm News Ltd immediately rejected the recommendation for a "News Media Council" which could force media to uphold journalistic ethics and issue an apology, correction or retraction, or grant a person right of reply.

The inquiry was launched following Murdoch's News of the World phone hacking scandal in Britain and after criticism by some politicians of biased coverage by Murdoch newspapers of the Australia government.

Australian media is among the world's most concentrated, with Murdoch's News Ltd controlling some 70 percent of its newspaper ownership. Murdoch's main newspaper rival in Australia is the Fairfax Media Group.

The independent report, released by the government, called for a News Media Council to set media standards and handle complaints made by the public.

"The establishment of a council is not about increasing the power of government or about imposing some form of censorship," the report said.

Original post:
UPDATE 2-Murdoch-sparked media inquiry recommends new Australian watchdog