The UK government has cleared the merger of the Pinewood and Shepperton filmmaking facilities, a decision that spares the proposed $180m super-studio from having to be scrutinised by the local anti-trust watchdog, the Competition Commission.

The proposal was waved through on Tuesday evening by Secretary of State for Trade and Industry Stephen Byers as "the acquisition by Pinewood Studios Holdings of Shepperton Holdings." However, Pinewood Studios chairman Michael Grade has stressed that the move is conceived as a merger of the two facilities, not a takeover.

Grade proposed the move earlier this year, arguing that the UK facilities faced increasing competition from for large-scale productions from studio facilities in countries such as Australia, the Czech Republic, Spain and Canada.

The merged operation would also be linked to the digital effects house, The Mill, which is 40% by Shepperton Holdings and 60% by parties including its management and pop group U2.

Shepperton was originally taken over by in 1995 by a consortium led by the blockbuster filmmaking brothers, Ridley and Tony Scott. In August, Ridley Scott signaled his interest in making a deal with Grade by selling its majority holding but remaining involved 'in maintaining Shepperton and The Mill as world class film-making facilities."

Grade has indicated that the both Scotts would be offered senior positions within the merged operations.

Grade has declined to comment on how the two studios would co-exist as one company other than to say that the Shepperton and Pinewood "brands" would be kept distinct. He maintained that it was hard for any one studio to function at more than 85% capacity.

"If we have three spare sound stages and a production wants to shoot, sod's law, they will want four," he told Screen International at the time his merger proposal first surfaced. "The British film industry has always suffered from fragmentation. If we are going to have a substantial UK film production base, it is time we had a little consolidation."