Police arrested David Cameron's former spokesman on Friday over the scandal that has shut down Rupert Murdoch's News of the World, forcing the prime minister to defend his judgment while promising new controls on the British press.
As Cameron fielded hostile questions over why he had hired the paper's former editor Andy Coulson in 2007, despite knowing that one of his journalists had been jailed for hacking into voicemails in search of scoops, Coulson was being arrested by police on suspicion of conspiring in the illegal practice.
Underlining the seriousness of the threat facing his News Corp empire, Murdoch will fly to London on Saturday to deal with the crisis, according to two people familiar with his plans.
And in a sign of how it could be escalating further, The Guardian newspaper reported on its website that police are investigating evidence an executive at Murdoch's News International unit may have deleted millions of emails from an internal archive in an apparent attempt to obstruct police investigations. A spokeswoman for Murdoch's News International unit said the allegation was rubbish.
We are cooperating actively with police and have not destroyed evidence, she said.
Cameron said he took full responsibility for his decision to appoint Coulson, who quit Downing Street in January when police relaunched inquiries. But the premier rebuffed criticism and strove to spread the blame for an affair that has generated public outrage against the press, politicians and police.
Murder victims, terrorist victims, families who have lost loved ones in war... he said: That these people could have had their phones hacked into in order to generate stories for a newspaper is simply disgusting.
So widespread was the rot, Cameron told an emergency news conference after Murdoch dramatically shut down his best-selling Sunday paper, that only a completely new system of media regulation and a full public inquiry into what went wrong over a decade at News of the World and beyond would meet public demand.
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.
In another indication of spreading fallout, police said they had arrested a 63-year-old man in Surrey in southern England over allegations of inappropriate payments to police. A police spokesman said the man was not a serving policeman.
News of the World and other newspapers have been accused of paying the police for information.
Police also raided another tabloid, the Daily Star, earlier on Friday over allegations of phone hacking.
PRESS BARONS' GRIP
While defending himself for hiring Coulson, Cameron said politicians of all parties had been in thrall to press barons for decades. He indicated a new assertiveness toward the Murdoch empire by withholding overt endorsement of News Corp's controversial bid for British broadcaster BSkyB.
Shares in the pay-TV chain fell 7.6 percent after the media ministry also said it would take events at the News of the World into account before giving its approval to the takeover. News Corp shares in New York lost around 4 percent.
Cameron's opponents on the left want to block the $22-billion bid for the 61 percent of BSkyB that he does not already own on the grounds it would give Murdoch too much political clout. The day's events created new uncertainties for investors who had welcomed the government earlier giving its blessing.
In a mark of the drama of larger-than-life personalities at play, Cameron also criticized his friend and neighbor Rebekah Brooks, Coulson's predecessor as editor and now a top executive and confidante of Murdoch. She should have resigned herself, he said, after closing down the newspaper at a cost of 200 jobs.
Cameron told reporters he had heard that Brooks offered her resignation. I would have taken it, he said.
BROOKS' TOXIC BRAND
Journalists putting together the final edition of the 168-year-old title, Britain's biggest-selling Sunday paper, had an emotional, sometimes angry, meeting with Brooks, who told them, according to a staffer who was present, that the News of the World brand had become toxic. Advertisers and readers bailed out following allegations this week of serial phone hacking.
But the 43-year-old, whose mane of red hair, sharp wit and seemingly charmed relationship with the 80-year-old Australian-born media mogul have long made her an object of fascination for fellow tabloid journalists, made clear she was staying on to manage News International, Murdoch's British newspaper arm.
Brooks denied the company, which many assume will soon fill the gap left by the News of the World by extending publication of the Sun daily to Sundays, was simply combining a useful cost-saving measure with a theatrical attempt to remove a threat to its expansion in television.
She has denied knowing that journalists on the paper were hacking the voicemails of possibly thousands of people. But she has become the focus of anger among the 200 News of the World staff sacked by Murdoch's son James with little ceremony.
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.
Fellow journalists saluted the end of a venerable, muckraking title: Hacked To Death headlined Murdoch's own Times. Paper That Died Of Shame said the tabloid Daily Mail.