Prime Minister David Cameron promised sweeping new rules for Britain's press on Friday and a full inquiry into failures by police and politicians as his own former spokesman was arrested over a newspaper phone-hacking scandal.
Cameron fended off suggestions at an emergency news conference that he had lacked judgment in hiring Andy Coulson, an ex-editor of Rupert Murdoch's News of the World who he confirmed was under police investigation.
A day after Murdoch moved to stem the scandal by shutting down the best-selling Sunday newspaper, Cameron spread the blame to include his Labour predecessors for a culture dating back decades in which politicians had been in thrall to press barons.
The Conservative leader said that in addition to following up a police investigation with a full public inquiry into the News of the World affair he would also order an independent panel to draft new media regulations.
This scandal is not just about some journalists on one newspaper, Cameron said. It's not even just about the press. It's also about the police. And, yes, it's also about how politics works and politicians too.
Murdoch, the 80-year-old Australian-born magnate who has come to dominate British newspapers, shut down the best-selling Sunday title on Wednesday as he battled to prevent the scandal fueling political opposition to his $22-billion takeover bid for the highly profitable broadcasting group BSkyB.
Cameron's government has already given its informal blessing to the deal, despite concern especially on the left that it would give Murdoch's U.S.-listed News Corp too much power. But at Friday's news conference, the prime minister refrained from any endorsement of the BSkyB bid, however, and stressed that proper legal processes would take some time.
Shares in BSkyB, in which Murdoch already has a 39 percent stake, dropped nearly 5 percent after the culture ministry said it would take account of the moves at the News of the World before deciding whether to approve the deal.
BROOKS SHOULD HAVE GONE
Conscious of the levels of public anger against the News of the World, Cameron was at pains to echo popular sentiment:
Murder victims, terrorist victims, families who have lost loved ones in war, sometimes defending our country ... That these people could have had their phones hacked into order to generate stories for a newspaper is simply disgusting.
And he also did not spare the woman at the center of the storm -- Murdoch confidante and former editor, Rebekah Brooks.
She, like Coulson, has denied knowing that journalists on the paper were hacking the voicemails of possibly thousands of people. Unlike Coulson, the 43-year-old is still employed, running Murdoch's British newspaper arm News International.
But she has been become a lightning rod for the anger of the 200 journalists and other staff who lost jobs at the News of the World. Cameron said he had heard that Brooks offered her resignation: I would have taken it, he said.
Earlier, Labour leader Ed Miliband was also blunt: Rebekah Brooks should take responsibility for what happened while she was editor of the News of the World ... and I don't think frankly closing down the News of the World changes that.
Both he and Cameron have concluded that a system under which newspaper publishers largely supervise their own code of conduct must be tightened -- though quite how will be a source of great debate as the media defend their freedoms to report.
Cameron said an independent panel could start work within months -- much sooner than the judge-led public inquiry which must wait for the end of the police case into the News of the World -- and that it must be free to draft its own proposals.
But he added: It should be truly ... independent of the press, so the public will know that newspapers will never again be solely responsible for policing themselves ... This new system of regulation must strike the balance between an individual's right to privacy and what is in the public interest.
POLICE, POLITICS UNDER FIRE
The police face tough questions over why an initial investigation into phone hacking was closed after the conviction of the News of the World royal correspondent and a private investigator in 2007, despite widespread calls for further probing of a practice alleged to be widespread.
Detectives are also now looking into payments, in the tens of thousands of pounds (dollars), by journalists to police officers, mostly for information. The police also face questions over some officers' friendships at News International.
Cameron, trying to strike a balance between accepting his own share of responsibility and sharing out blame to his opponents said: It's no good ... just criticizing the police.
Because party leaders were so keen to win the support of newspapers ... we turned a blind eye to the need to sort this issue, get on top of the bad practices, to change the way our newspapers are regulated.
Police have arrested several journalists in recent weeks after reopening inquiries in January into the hacking of cellphone voicemails. A spokesman said Coulson, 43, had been arrested on Friday in London on suspicion of conspiring to intercept communications and conspiring to corrupt.
Coulson resigned as editor of the News of the World after the convictions in 2007 but has sworn he knew nothing of the practice of monitoring the cellphone mailboxes of celebrities and, police now say, ordinary and vulnerable people.
Hired almost immediately by Cameron to run his media efforts, Coulson became a key figure in Downing Street when the Conservatives won a general election last May, ending 13 years of rule by Labour -- which, some said significantly, had lost the support of Murdoch's News International press stable.
The renewal of police inquiries in January, as News Corp acknowledged evidence that phone hacking was more than just the work of one rogue reporter, prompted Coulson to quit the prime minister's office, still protesting his innocence.
In a startling response to the scandal engulfing the global media empire, Murdoch's son James announced he would publish the 168-year-old News of the World, the best selling Sunday title in the country with some 7.5 million readers, for the last time this weekend.
Hacked To Death headlined Murdoch's own Times newspaper in London. Paper That Died Of Shame was the verdict of the Daily Mail, a rival, tabloid title.
As allegations multiplied that News of the World journalists hacked the voicemail of thousands of people, from child murder victims to the families of Britain's war dead, the tabloid hemorrhaged advertising, alienated readers and posed a growing threat to Murdoch's bid for BSkyB.
Analysts estimate -- though full accounts are not published -- that the newspaper made perhaps some 10 million pounds ($16 million) a year on sales of 2.7 million copies a week, compared to perhaps 100 times that which Murdoch could hope to earn from full control of the Sky pay-TV chain in Britain.
The scandal, as it erupted this week with allegations that phone-hacking extended to victims of crime, has given new heart to those, especially on the left, who want to block the deal.
Some analysts believe it is still likely to go through, given that Cameron's government has already given its blessing in principle. There is still no deadline for approval, however, and some market experts believe political uproar could still thwart the deal, whatever the legal technicalities of approval.
Opposition leader Miliband said: Given the doubts hanging over the assurances about phone hacking by News International executives, doubts which grow by the day, I cannot see, and the public will not understand, how this process can provide the fair dealing that is necessary.
I strongly urge the government to take responsibility and think again about how it is handling the BSkyB decision.
Murdoch, the 80-year-old Australian-born media mogul, is an object of fear among British politicians, using his newspapers, which include the biggest selling daily the Sun as well as London's Times, to set political agendas and capable of swaying at least some votes by apportioning approval to right or left.
Miliband said closing a newspaper which many expect will be quickly, and more economically, replaced by a Sunday edition of the Sun, was not enough to answer the allegations of crimes that also include bribing police officers for information.
And he called again for Brooks, 43, to resign as chief executive of News International. She denies knowledge of some of the gravest instances of phone-hacking alleged to have been committed while she ran the paper a decade ago -- including that an investigator tapped into, and deleted, voicemails left for missing schoolgirl Milly Dowler, who was later found murdered.
Brooks has become the focus of anger among the 200 News of the World staff sacked with little ceremony on Thursday.
There was seething anger and pure hatred directed toward her, one reporter said: We think they're closing down a whole newspaper just to protect one woman's job.
The ruthlessness of the decision, announced by Murdoch's son and heir apparent James, was a dramatic turn in Murdoch's long and controversial career which now spans the globe and includes Fox television and the Wall Street Journal in the United States and major broadcasting operations in Asia.
In his native Australia, the influential Greens Party called on the government to investigate Rupert Murdoch's media holdings in that country. The Greens, who hold the balance of power in the upper house of parliament and whose political backing is vital to the minority Labor government, asked for an official inquiry into News Corp's local operations.
James Murdoch said the News of the World, which his father bought in 1969, had been sullied by behavior that was wrong.
Indeed, if recent allegations are true, it was inhuman and has no place in our company, he said in a statement.
The Internet domain name sunonsunday.co.uk was registered on Tuesday by a British individual who opted to remain anonymous, according to domain names look-up service Who.is, reinforcing speculation the News of the World would be replaced by the Sun publishing on seven days rather than its present six.
Last month, Brooks prepared the ground for seven-day working across News International's four titles, and appointed two new managing editors, one with responsibility for the tabloids and one for the broadsheets. Other publishers have also tried to cut costs by merging Sunday and daily operations. ($1 = 0.622 British Pounds)
(Additional reporting by Georgina Prodhan, Kate Holton and Tiffany Wu; Writing by Alastair Macdonald; Editing by Philippa Fletcher)