Damage limitation bid may not placate Murdoch empire's critics

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News International yesterday made a dramatic attempt to draw a line under its phone hacking of politicians and celebrities by announcing a fulsome apology and its intention to pay millions of pounds in damages to victims.

Rupert Murdoch's newspaper group formally recognised the repeated failures of its executives and editors to reveal the full extent of voicemail interception at the News of the World.

In the first acknowledgement from the company that its employees' phone hacking was far more widespread at the NOTW than it has ever admitted during five years of investigations, the company confirmed it was settling the cases of eight public figures, including the actress Sienna Miller and the former cabinet minister Tessa Jowell, and setting up a compensation scheme to deal with potential claims from dozens more victims of the private investigator Glenn Mulcaire.

The media giant, which had previously conducted two lengthy internal investigations into the saga and had until recently insisted that hacking was restricted to a single "rogue" reporter, admitted that its inquiries had "failed to uncover important information" and that its actions were "not sufficiently robust".

News International sources insisted the climbdown, one of the most humiliating in Fleet Street history, would not result in the departure of senior executives. In a statement to staff, chief executive Rebekah Brooks, a former editor of the NOTW, said the company wished to express its "regret for past behaviour".

Mr Murdoch has set aside a £20m war chest to settle the legal claims, it is believed – carefully limited to the time period 2004 to 2006 despite suggestions Mulcaire was conducting hacking before then – at an expected cost of between £50,000 and £100,000 in damages per case.

The eight damages claims in which the company was expected to offer immediate settlement alongside those of Ms Miller and Ms Jowell were those of football pundit Andy Gray; interior designer Kelly Hoppen; David Mills, the lawyer and Ms Jowell's estranged husband; Joan Hammell, aide to John Prescott when he was Deputy Prime Minister; Nicola Phillips, formerly assistant to publicist Max Clifford; and sports agent Sky Andrew.

But there was little immediate sign that News International's offers had been accepted. Ms Jowell said: "It's now for the lawyers to do their work." The more claimants accept the offer, the less evidence will be aired in public.

The apology also raises the prospect of News International possibly facing criminal prosecution as a corporation at a future date, under the Regulation of Investigatory Powers Act 2000.

The decision to settle some of the 24 civil cases facing News International comes after a turbulent week for the company. On Tuesday, Scotland Yard detectives conducting the third investigation into hacking arrested the NOTW's chief reporter, Neville Thurlbeck, and former executive Ian Edmondson, who was sacked in January following the discovery of emails allegedly linking him to the scandal.

In a statement, the media group said: "Past behaviour at the News of the World in relation to voicemail interception is a matter of genuine regret. It is now apparent that our previous inquiries failed to uncover important evidence and we acknowledge our actions then were not sufficiently robust."

But the choreographed operation from News International's Wapping headquarters to try to end the weekly drip of allegations was greeted with scepticism by those who have pursued the scandal. Chris Bryant, the Labour MP who is one of the alleged victims of Mulcaire, said: "This is nothing but a damage limitation exercise which proves that everything they've said about this case has been a pack of lies." Andrew Neil, the former Sunday Times editor, said: "This is one of the most embarrassing apologies I've ever seen from a major British corporation. They are trying to close it down with their chequebook but I don't think they're going to succeed."

The change of stance by News International is likely to prompt a re-examination of previous statements by senior executives at the company, including the NOTW's current editor, Colin Myler, former editor Andy Coulson and Les Hinton, former chief executive of News International and now head of Dow Jones. In evidence to the Commons Media Committee in 2009, Mr Hinton said the company had trawled through "thousands" of company emails: "There was never firm evidence provided that I am aware of that implicated anybody else other than Clive [Goodman] within the staff of the News of the World. It just did not happen and had it happened then we would have acted."

Charlotte Harris, a media lawyer at Mischon de Reya who represents Mr Andrew, said of News International: "The civil actions have forced them into a position where they can no longer deny that telephone interception took place at the News of the World and was not the work of a lone reporter. So far there has been no indication as to why it has taken so long for this admission to be made. Questions should be asked as to their internal enquiries five years ago."

Lawyers for jailed Scottish politician Tommy Sheridan have called for Scottish police to investigate Mr Coulson for suspected lying on oath after he told Sheridan's perjury trial there was "no culture of phone hacking" at the NOTW.

At a conference on Thursday, Rupert Murdoch's son James expressed the desire to "put this problem into a box. If you get everybody sucked into something like that, then the whole business will sputter which you don't want."

Whether today's apology will help that goal remains to be seen. Rod Dadak, a partner at the law firm Lewis Slikin, suggested that "the list of people who will now claim their phone may have been hacked will grow immeasurably."

Sources at News International expect the number of cases it settles to be about 91 – the number of individuals whose owner-modified voicemail PIN codes had been obtained by Mulcaire. But the number of claims against the company is likely to be vastly higher because the private investigator had listed 4,332 full or partial names in his documentation and 2,978 mobile phone numbers.

News International yesterday filed its proposal to concede some hacking claims with High Court judge Mr Justice Vos, who will decide next week whether all the claims should be heard together.

Who Qualifies?

News International says it will offer compensation on a scale determined by how many of these criteria are met:

*There is proof that the private investigator Glenn Mulcaire, who was jailed for his part in hacking royal aides, was acting as an agent for News International;

*There is proof that Mulcaire had the mobile and PIN of the said individual in order to attempt to access their voicemail;

*There is proof that Mulcaire attempted to access their voicemail;

*There is proof that he accessed their voicemail;

*That, as a result of the accessed voicemail, an article was written in the paper which was damaging.