Murdoch backs Brooks as inquiry ordered

Shares in News Corporation fell 78 cents, or 4.18 per cent, to $17.76 in mid-afternoon trading in New York.

This afternoon, Mr Murdoch, chairman and chief executive of News Corporation, News International’s parent company, gave Ms Brooks his backing. In a statement, he said that the allegations against the News of the World were “deplorable and unacceptable”.

He added: “I have made clear that our 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’s leadership.

“We are committed to addressing these issues fully and have taken a number of important steps to prevent them from happening again.”

He also announced the appointment of Joel Klein, the former New York City education chief, “to provide important oversight and guidance”.

Ms Brooks, who was in charge of the News of the World at the time of the Dowler murder, has vowed to stay on as chief executive. She insists that she knew nothing about the decision to approve the alleged interception of Milly Dowler’s mobile phone messages and News International said today that it had uncovered evidence supporting that claim.

Mr Cameron came under pressure at Prime Minister’s Questions to agree to a full public inquiry into the phone hacking scandal - and tried to wrongfoot his opponents by announcing two separate, far-reaching public inquiries.

One, possibly led by a judge, will investigate the extent of Fleet Street malpractice as well as examining individual hacking cases. It is also likely to look at the future regulation of the press.

The second will examine why the original Metropolitan Police inquiry failed to get to the bottom of hacking claims. A senior News of the World reporter was jailed in 2007, as was the private investigator Glenn Mulcaire, but other allegations were dismissed as unproven.

The Prime Minister resisted pressure from Ed Miliband, the Labour leader, for an inquiry to be set up immediately. Mr Cameron said most of the work would have to wait until the Met had completed their current investigations into the News of the World.

However, some work could begin on issues of media ethics and the regulation of Fleet Street, according to Downing Street officials.

Mr Cameron also rebuffed calls for the takeover of BSkyB by News Corporation to be referred to the Competition Commission.

The Prime Minister said the recent hacking revelations were “absolutely disgusting” and that everyone in the country will be revolted” by what they had learned.

He insisted it was vital that the current police investigation — the biggest in the country and without any involvement of officers who took part in the initial investigation — should be allowed to run its course without being jeopardised by a public inquiry at the same time.

Mr Miliband said it was essential that any inquiry was led by a judge who had power to compel witnesses to attend and take evidence under oath. It should look at unlawful and unethical newspaper practices, the current self-regulation of the press, overseen by the Press Complaints Commission, and the relationship between newspapers and the police.

Mr Miliband’s more aggressive stance on the BSkyB deal represented a shift from yesterday, when he said the issue of media plurality was distinct from hacking claims.

Today he said that the “public will react with disbelief” at Mr Cameron’s refusal to slow the pace of the BSkyB deal, which is due for a final decision this Friday. The Prime Minister’s answer was “out of touch”, he said, at a time when it was not clear where the criminal investigation would take in senior executives at News International.

Mr Miliband also criticised what he said was Mr Cameron’s “catastrophic error of judgement” in employing Andy Coulson, the former News of the World Editor who resigned over the hacking scandal, as his head of communications in Downing Street.

The former Labour minister Chris Bryant, who is himself taking legal action against the News of the World over allegations his own phone was hacked, opened this afternoon’s emergency Commons debate with a fierce attack on the newspaper and on the police.

“I think a lot of lies have been told by a lot of people,” he said.

With the anniversary of the 7/7 terror attacks tomorrow, Mr Bryant said the families of victims were among those targeted.

He added: “In addition, I am told that police are looking at not just Milly Dowler’s phone and those of the families of Holly Wells and Jessica Chapman, but the case of Madeleine McCann and 15-year-old Danielle Jones who was abducted and murdered in Essex in 2001 by her uncle Stuart Campbell.”

He continued: “Scandalously, it also seems that the News of the World targeted some of those police officers who were at various times in charge of the investigation into the News of the World itself.

“We can only speculate why they would want to do that.”

Mr Bryant told MPs: “These are not just the amoral actions of some lone private investigator tied to a rogue News of the World, they are the immoral and almost certainly criminal deeds of an organisation that was appallingly led and had completely lost sight of any idea of decency or shared humanity.”

Tory MPs also joined in the attacks, including Zac Goldsmith, who said that News Corporation had “grown too powerful and has abused that power”.

“We’ve seen the abuse of position and power on an awesome scale, and the blurred lines that we’ve allowed to exist for the press, to allow them to do what we need the press to do, have been well and truly stretched,” he said.

“We have seen, I would say, systemic abuse of almost unprecedented power. There is nothing noble in what these newspapers have been doing.

“Rupert Murdoch is clearly a very, very talented businessman, he’s possibly even a genius, but his organisation has grown too powerful and has abused that power.”

The fiercest attack, however, came from Labour’s Tom Watson, who called for the News International chairman James Murdoch to be suspended from office for what he called “an attempt to pervert the course of justice”.

He said: “The whole board of News International is responsible for this company. I believe James Murdoch should be suspended from office while the police now investigate what I believe was his personal authorisation to plan a cover-up of this scandal.

“Mr James Murdoch is the chairman. It is clear now that he personally without board approval authorised money to be paid by his company to silence people who had been hacked and to cover up criminal behaviour within his organisation.

“This is nothing short of an attempt to pervert the course of justice.”

He said officers should ask Mr Murdoch and Ms Brooks whether they knew of the attempted destruction of data at a storage facility in Chennai, India.

Mr Watson also alleged that Ms Brooks was warned by Scotland Yard in 2002 that her newspaper was interfering with the pursuit of justice by trying to discredit an officer in charge of a murder investigation. But he said that the News of the World executive named at that meeting was not sanctioned but was instead promoted.

Faced with the barrage of criticism, Mr Coulson’s successor at the News of the World, Colin Myler, called senior to a meeting today to discuss the latest accusation and reassure them that the newspaper had changed.

Mr Myler told his staff that if the allegations were proved they amounted to “the most devastating breach of journalistic ethics imaginable”.

“There is an extremely painful period ahead as we try to... atone for the wrongs of our predecessors,” he said. “The shocking allegations about the News of the World do not describe the same newspaper that we see today.”