The owner of the Daily Mail has accused tech giants of “blackmail” over the news content row in Australia and called into question the “unholy alliance” between Facebook and Rupert Murdoch's News Corp.

Lord Rothermere, chairman of Daily Mail and General Trust (DMGT), said in a letter to the Financial Times that “politicians should be very worried” about the incident.

“Reporting news costs money; but for years Google and Facebook have plundered news content without paying for it while at the same time extracting ever greater profits from advertising markets they dominate,” he wrote.

Facebook blocked news content on its service in Australia last week over a proposed new law that would force the social network and Google to pay publishers for news. Google also threatened to withdraw its search engine from the country.

After discussions with both companies, Australia agreed to amend the bill – which passed in parliament on Thursday – and the social network agreed to lift the ban on sharing news.

“The platforms responded with blackmail. Google threatened to withdraw search in Australia; Facebook cancelled news. A nation was held to ransom – and it surrendered,” Lord Rothermere said.

“As long as the platforms persuade enough desperate news publishers to sign take-it-or-leave-it deals, there will now be no fair, independent arbitration.”

Lord Rothermere also questioned the deal struck last week between News Corp and Google to secure “significant payments” for its journalism.

The three-year agreement will hand News Corp a slice of Google’s advertising revenues and lay the foundations for a new subscription platform.

The owner of The Times and The Sun said a string of its titles would join Google News Showcase, a tab where news licenced from UK and overseas publications will appear.

“What does [News Corp] give in return? Will it continue to fight for fair terms of business for all publishers, or are two of the world’s most ruthless companies now locked in an unholy alliance, giving rise to unfair competition unless its terms are made public?,” Lord Rothermere asked.

On Wednesday, Facebook’s head of global affairs, Sir Nick Clegg, said the stand-off between Australia and Facebook had been the result of a “fundamental misunderstanding”.

“It’s like forcing carmakers to fund radio stations because people might listen to them in the car – and letting the stations set the price,” he said.

But Lord Rothermere – whose company owns the Daily Mail, Mail on Sunday, Mail Online, the i and Metro – insisted the Australian deal meant Facebook was setting its own rules.

The intervention comes as DMGT consumer media division expressed "deep misgivings" about the incoming online harms bill.

In a submission to the House of Lords Communications and Digital Committee, DMG Media said the legislation was currently "incompatible with the freedom of expression enjoyed by the British press".

"We appreciate there are those who would argue that this is necessary for the good of society, but that is the argument used by the Chinese government."

The company warned that the threat of massive fines may lead the platforms to "over-censor", causing controversial opinions to be silenced. "It is claimed that 'harmful' will be further defined in secondary legislation, but it is unclear how this could be done with anything approaching legal certainty."

DMG said it was crucial the online platforms had a "clear legal obligation" to protect freedom of expression under the online harms bill, with "stringent penalties" if they fail to do so.

Elsewhere, Facebook is poised to sign licensing agreements with a series of Canadian publishers as the country prepares to introduce its own Australia-style regulation that will force technology giants to pay for news.

The Canadian government has publicly committed to following Australia’s example in tabling legislation that will require Silicon Valley businesses to pay for news.

An insider said that the situation in Canada was not the same as Australia, which was “by and large dominated by one large media conglomerate [News Corp] that has a very heavy influence on government and government policies”.

Experts have questioned the long-term impact of Facebook’s decision to remove news from Australia for several days, a decision that led to fears that conspiracy theories would fill the vacuum.

“In the longer term, Facebook may regret the dispute,” said Damian Tambini of London School of Economics. “There will be other policy battles, over taxation and liability for instance, where they might benefit from better relationships with government.”