Wed Jul 6, 2011 6:12pm EDT
* Cameron, friend of former editor, says there should bephone-hacking inquiry
* Murdoch backs his senior executive as parliament holdsemergency debate
* Families of London bomb victims say may have had phonehacked (Adds News Corp statement, finance minister's phone may havebeen hacked)
By Kate Holton and Jodie Ginsberg
LONDON, July 6 (Reuters) - Rupert Murdoch promised fullcooperation on Wednesday to resolve a scandal shaking his mediaempire after British Prime Minister David Cameron promised aninquiry into what he called "disgusting" phone hacking by anewspaper.
Responding in parliament to allegations that the News of theWorld eavesdropped on voicemail for victims of notorious crimes,including child murders and suicide bombings, Cameron said hewas "revolted" and would order inquiries, probably into both thespecific case and more widely into Britain's cut-throat media.
The opposition, keen to highlight Cameron's own ties toMurdoch and to two former editors at the eye of the storm, notedthat any inquiry would not start, let alone finish, for monthsif not years. Critics accused the Conservative government oftrying to bury the embarrassment of the long-running saga.
Murdoch, whose News International group faces boycotts fromadvertisers and readers as well as questions over a takeover bidfor broadcaster BSkyB , made a rare public statement tosay he too found the hacking, and reports of buying tips frompolice, "deplorable and unacceptable" and would ensuretransparency.
But the 80-year-old Australian-born American media magnatemade clear he was standing by Rebekah Brooks, the 43-year-oldhead of his British newspaper operation. She was editor in 2002when, police say, a News of the World investigator listened to-- and deleted -- voicemails left for the cellphone of missing13-year-old Milly Dowler, who was later found murdered.
Cameron said: "We do need to have an inquiry, possiblyinquiries, into what has happened." The prime minister facesquestions over his own judgment in appointing Brooks's successoras editor, Andy Coulson, as his spokesman. Coulson quit Cameron's office in January, but denies knowing of any hacking.
Cameron, who regularly hosts Brooks at his home, said: "Weare talking about murder victims, potentially terrorist victims,having their phones hacked into. It is absolutely disgusting." In a further twist to the affair, a spokesman for FinanceMinister George Osborne confirmed media reports that police hadtold the senior cabinet minister that his name and home numberwere in notes kept by two people jailed for phone hacking.
"FULLY COOPERATE"
Murdoch said in his statement: "Recent allegations of phonehacking and making payments to police with respect to the Newsof the World are deplorable and unacceptable.
"I have made clear that our company must fully andproactively cooperate with the police in all investigations andthat is exactly what News International has been doing and willcontinue to do under Rebekah Brooks' leadership."
The leader of the opposition Labour party, Ed Miliband, saidCameron had made a "catastrophic error of judgment" in hiringCoulson as his communication director and said Brooks, ahigh-flying Murdoch confidante, should resign her current post.She says she knew of no illegal hacking while editing the paper.
When its royal correspondent and an investigator were jailedin 2007 for hacking into the cellphones of royal aides to breaka story about an injury to Prince William's knee, the newspaperinsisted it was a case of one rogue reporter.
After campaigning by celebrities and politicians whosuspected they too had been spied on, police launched a newinquiry in January and, following the arrests of severaljournalists, the affair has taken on dramatic new proportions.
Shares in Murdoch's News Corp, which also controls Foxtelevision, the Wall Street Journal, London's Times and the NewYork Post among other titles, were down over 5 percent in NewYork, while shares in BSkyB fell more than 2 percent.
Major advertisers abandoned the News of the World.
Speaking for one carmaker Lance Bradley said: "MitsubishiMotors in the UK considers this type of activity -- especiallyin such a distressing case -- to be unbelievable, unspeakableand despicable ... This is where we draw the line."
Internet campaigns and the actor Hugh Grant urged readers toboycott the paper which, if successful, may prove more damagingthan political condemnation to Britain's best-selling Sundaypaper, read by some 7.5 million people on sales of 2.6 million.
Sales of News Corp's daily sister paper the Sun neverrecovered in Liverpool after it offended the city's footballfans in the wake of the 1989 Hillsborough stadium disaster.
"We need an inquiry that uncovers all the practices and theculture, not just of the News of the World but all tabloidjournalism in this country," said Grant, a fixture of the gossipcolumns, who says he was a victim of phone hacking.
BROADCASTER BID
Though analysts believe the chances of the BSkyB purchasebeing derailed are slim, the watchdog which oversees Britain'sbroadcasting industry issued a statement pointing out that ithad a duty to assess whether holders of a broadcasting licenceare 'fit and proper'. Murdoch is trying to buy the 61 percent ofthe BSkyB pay-TV group that it does not already own.
"There has been a shift in the last three days, there is nowa consensus that this needs full and proper scrutiny," mediaconsultant Steve Hewlett told Reuters.
Police have been criticised for being slow to investigatethe phone-hacking claims but reject suggestions this was becauseof alleged payments to officers. The head of the MetropolitanPolice Paul Stephenson said allegations of "inappropriatepayments" to some officers were under investigation.
British politicians have said in the past they fearedcriticising any of the Murdoch papers because they feared theirown private lives might be exposed.
Among further allegations, families of Londoners killed byIslamist suicide bombers in 2005 said police had told them theirvoicemail messages may have been intercepted.
Graham Foulkes, whose son David was one of 52 people whodied in the 7/7 bombings, told BBC radio he was contacted bypolice after they found his private contact details on a list aspart of the investigation into hacking claims.
"We were using the phone frantically trying to getinformation about David and where he may have been and ...talking very intimately about very personal issues, and thethought that these guys may have been listening to that is justhorrendous," Foulkes said. Relatives are preparing to mark thesixth anniversary of the attacks on Thursday.
News International said it would be contacting the DefenceMinistry about reports the phone numbers of British soldierskilled in Iraq and Afghanistan were found in the files of aprivate investigator jailed for hacking phones. "If these allegations are true we are absolutely appalled and horrified," it said in a statement.
On Tuesday the company said new information had beenprovided to police. The BBC said the material related to e-mailsappearing to show payments to police officers for informationand were authorised by Coulson when he was editor.
Commentators suggested information about the payments hadbeen released to deflect attention from Brooks, who unlikeCoulson is still a key part of Murdoch's business. The Guardian,a left-leaning daily which has taken a lead in investigating thescandal, said News International would also be saying thatBrooks was on holiday at the time of key alleged incidents.
"If Rebekah falls then who is next? Well it's JamesMurdoch," said media consultant Hewlett, suggesting that keepingher in her position served to protect her superior, Murdoch'sson James, from
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Jul 06, 2011 6:24pm EDT -- Report as abuse abbydelabbey wrote:Murdoch has felt above the law, untouchable for too long — he is seeking to control the media and by that what people hear and read … very, very dangerous….
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