Murdoch’s empire under fire from all sides

Rupert Murdoch’s takeover of Britain’s biggest commercial broadcaster was in doubt last night, as his newspaper empire battled fresh allegations of hacking phones of murdered children’s families and companies withdrew advertising from its best-selling title.

In another damaging day for Mr Murdoch, the communications regulator Ofcom revealed it was “closely monitoring” allegations of widespread criminality at News International and said it had a duty to be satisfied he and his top executives were “fit and proper persons” to control BSkyB.

In a debate in the House of Commons, the former Labour minister Tom Watson accused James Murdoch, the chairman’s son and heir, of perverting the course of justice by engaging in a cover-up and called for him to be suspended from the News Corp board. Hours after the Labour MP Chris Bryant accused the News of the World of hacking phones linked to the murdered Essex schoolgirl Danielle Jones, Mr Murdoch gave his backing to the paper’s former editor and News International’s current chief executive, Rebekah Brooks.

Mr Murdoch called claims of hacking and payments to police officers “deplorable and unacceptable”. He said the company “must fully and proactively co-operate with the police in all investigations and that is exactly what News International has been doing and will continue to do under Rebekah Brooks’ leadership”.

While News Corp’s comments may have been intended to take the sting out of criticism of the BSkyB deal, they may also have been an attempt to take some of the pressure off Ms Brooks. David Cameron, a close friend of Ms Brooks, said: “We do need to have an inquiry, possibly inquiries, into what has happened.”

Last night, a spokesman for George Osborne said the chancellor’s private home phone number was discovered in records kept by Glenn Mulcaire, the investigator at the centre of the scandal. He stressed there was no evidence his phone had been hacked.

Amid public outrage, 15 companies – including Lloyds, Virgin, Vauxhall and the Co-op – pulled their advertising from this Sunday’s NOTW. In New York, News Corp’s shares fell by almost 5 per cent, at one point wiping $276m (£172.5m) from Mr Murdoch’s stake.