The FBI last night opened an investigation into allegations that Rupert Murdoch's News Corp sought to hack the phones of 9/11 victims.
On a day of further extraordinary developments in the hacking saga, sources at the Federal Bureau of Investigation said it had begun a criminal inquiry into the company, following claims that the News of the World tried to hack into the phone messages of victims. "We are looking into allegations," a source said.
News of the FBI investigation could prove to be a devastating blow for Mr Murdoch as he battles to save his media empire against the mounting wrath of politicians, the public and investors.
In other developments, Scotland Yard was plunged into further crisis over its handling of the phone-hacking scandal yesterday when it emerged that the News of the World's former deputy editor was hired by the force last year, heaping pressure on the Metropolitan Police commissioner, Sir Paul Stephenson.
Neil Wallis, who was arrested yesterday for his alleged role in the scandal, was employed by the Met as a public relations consultant for 12 months, at a time when the force was facing growing criticism over its failure properly to investigate criminality at the Sunday paper. The disclosure that Mr Wallis was paid £24,000 by the Met to provide "strategic communication advice" at the heart of the Yard between October 2009 and September 2010 came hours after the former executive, known among colleagues as "the Wolfman", was arrested on suspicion of conspiring to intercept voicemails.
The tardy revelation of Mr Wallis's employment led Theresa May, the Home Secretary, to write to Sir Paul demanding "the full picture" while the London Mayor Boris Johnson has called Sir Paul in to City Hall to explain himself.
The revelations concerning Mr Wallis are particularly damaging for the Yard because of allegations since July 2009 that it ignored evidence of multiple victims of voicemail eavesdropping and suspected involvement of NOTW journalists because of a close relationship with Rupert Murdoch's News International. The contract allowed Mr Wallis access to the highest levels in the Yard, advising the Commissioner's Office, the Directorate of Public Affairs and the Specialist Operations Command, where it is understood he worked closely with the Assistant Commissioner, John Yates.
The agreement required the former NOTW executive, who earned a reputation as a hard-nosed operator in the ruthless world of tabloid journalism, to work for two days a month inside Scotland Yard, earning £1,000 a day.
Mr Wallis, 60, who worked as deputy to the NOTW editor Andy Coulson and has more recently been working as managing director of the entertainment PR agency the Outside Organisation, became the ninth person to be arrested in relation to phone hacking when officers from Operation Weeting, the Yard's ongoing inquiry into the scandal, arrived at Mr Wallis's house in Chiswick, west London, at 6.30am. As detectives conducted a search of his home, he was held for 10 hours at a nearby police station on suspicion of conspiracy to intercept voicemails, before being released on police bail.Reuse content