James Murdoch will come under attack from shareholders at BSkyB's annual meeting on Thursday after the telecoms watchdog called his competence into question.

Mr Murdoch stepped down as BSkyB chairman amid fears the News International phone-hacking scandal would damage the firm, but he stayed on as non-executive director.

Shareholder group Pirc (Pensions Investment Research Consultants) has urged shareholders to vote against his reappointment due to the criticisms levelled at Mr Murdoch by communications regulator Ofcom.

Mr Murdoch is not considered to be independent, as his father Rupert is the ultimate controlling shareholder through News Corp, the group said.

"Although Ofcom stated the evidence available to date did not provide a reasonable basis to con-clude James Murdoch deliberately engaged in any wrongdoing, it was severely critical of him," a statement from Pirc said.

Ofcom hit out at Mr Murdoch's failure to uncover problems at News International earlier during its review of Sky's broadcasting licence in the wake of the hacking allegations.

The regulator determined BSkyB was "fit and proper" to hold a licence, but Mr Murdoch was spared no criticism in its concluding report.

News Corp defended Mr Murdoch at the time of September's Ofcom report, arguing the statements relating to his actions as an executive and director were "not at all substantiated by evidence".