Is phone-hacking scandal going to become Britain's Watergate?


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David Cameron was forced to cut Rupert Murdoch and his newspaper empire loose from the heart of government yesterday as he tried to deflect public anger about his failure to tackle the phone-hacking scandal.

Mr Cameron turned on Mr Murdoch's son James, saying there were questions "that need to be answered" about what his role was in the phone hacking cover-up, and criticising him for not accepting the resignation of News International's chief executive Rebekah Brooks.

He also admitted that his desire to win support from the company's newspapers had led him to turn "a blind eye" as evidence grew of widespread illegality at the News of the World.

With a newspaper suddenly closed, five arrests and more to follow, 4,000 possible victims, a media empire shaken to its foundations and a prime minister reeling after being caught up in the scandal, the escalating affair has become a political controversy comparable to the US Watergate saga, with ramifications for Downing Street, the British media and police investigators.

Last night, the media regulator Ofcom announced it would contact police about the conduct of Mr Murdoch's empire in covering up phone-hacking allegations, to determine whether it was a "fit and proper" owner of the satellite broadcaster BSkyB, which Mr Murdoch is attempting to buy outright. Shares in the broadcaster fell by eight per cent.

A judge-led public inquiry will investigate phone hacking. Rupert Murdoch and James Murdoch are prepared to give evidence on phone hacking under oath. Ms Brooks was stripped of control of NI's internal investigation and faced calls for her resignation from the Deputy Prime Minister Nick Clegg. Meanwhile, Wapping sources warned of worse phone-hacking revelations to come.

At a press conference in Downing Street, Mr Cameron defended his decision to appoint Coulson but admitted his relationship with senior members of the Murdoch empire had been too close. "The deeper truth is this ... 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," he said. "I want to deal with it."

Labour leader Ed Miliband said Mr Cameron was still failing to restore confidence in the Government's handling of the scandal.

Simon Carr writes: "For, News International, the collapse of the customary way of doing things, and to be caught in the rubble looking dodgy, must hurt. But David Cameron now has to do what Ed Miliband tells him."