BANGALORE, India -- The arms scandal gripping India has shown that upstart Internet news organizations are posing a real challenge to traditional media such as newspapers, magazines and television, analysts say.

The scandal broke on Tuesday when Internet news service tehelka.com screened a secretly filmed documentary showing public officials, army officers and bureaucrats apparently taking money from journalists posing as arms dealers. Despite protesting his innocence, the president of India's ruling Bharatiya Janata Party quit after a videotape showed him apparently receiving a large wad of money.

Four defense ministry officials have been suspended over the scandal and there is also a clamor for Defense Minister George Fernandes to resign. Fernandes was not implicated by the video but opposition critics says he should bear responsibility as the minister in charge. Reporters from Tehelka, which means "sensation" in Hindi, posed as arms dealers seeking to sell night vision devices to the army.

Last year, the maverick news service carried out a similar sting on cricket match fixing that shook the game to its foundations. A federal police probe that followed Tehelka's revelations resulted in former test cricketers Mohammad Azharuddin and Ajay Sharma being banned from the game for life.

Media analysts say the Internet upstarts are seriously challenging the traditional media, which has a much cozier relationship with officialdom that editors and publishers are reluctant to change. "The (Internet) media has emerged as a watchdog," Bhaskara Rao, chairman of the Center for Media Studies, told Reuters. "They're reminding the rest of the media what they have forgotten."

Media analysts say that the Internet has allowed changes to two basic aspects of news gathering -- cutting costs and slashing through levels of bureaucracy. Tehelka.com is barely a year old with a tight team operating out of small office. In a traditional news gathering set-up, publishers would have had to spend vast amounts to set up facilities to print or broadcast.

As a small team, Tehelka's reporters could coordinate closely on all aspects of the story. In a large organization they may have come up against a number of editorial hurdles which could have slowed or blocked the investigation. Media critic Amita Malik said the Internet had also become significant because of the ease with which stories could be circulated. In the case of the arms scandal, Tehelka's scoop was assisted by TV networks which jumped on the story.

"The two have become winning partners," she said. "The Internet ... has untrammeled access to inform the public and the means to distribute it is significant." The Internet has only around two million subscribers among India's one-billion-strong population, but its influence is greater because it reaches the elite, Malik said.

"It's easier (to publish with the Internet) and there is speed," Rao said. "Small or big has no meaning, that's what this brings out."

Sunil Lulla, chief executive officer of Bangalore-based consumer portal Indya.com, told Reuters that Internet news tended to spread via e-mails like a virus. "Almost anybody could have broken that (tehelka.com) story. However, I believe the fact that it is viral and so immediate goes to show the(Internet's influence)," he said.

Tehelka said the arms sting cost the company just 1.1 million rupees ($23,550) in payments -- and reckons it could have gone further if it had more money to spend. "These people (tehelka.com) have hardly spent anything. They have spent peanuts," he said. "You (just) need good journalists, good technology and a good brand."