How the outsiders took control

Elisabeth Murdoch could yet be her father's saviour

A fake sheikh famously helped to secure dozens of scoops for Rebekah Brooks during her tenure as editor of the News of the World. On Thursday it was the words of a real Saudi prince that should have alerted us.

Sitting on the upper deck of his £60m yacht, Prince Al-Waleed bin Talal, the second biggest shareholder in News Corp after Rupert Murdoch, said if Ms Brooks had shown any sign of explicit involvement in the phone-hacking scandal, "for sure she has to go – you bet she has to go".

In an interview for BBC2's Newsnight, Prince Al-Waleed, the Cannes Croisette shimmering behind him, was more enthusiastic about Rupert and James Murdoch. The die was cast. What stronger inference could there be that Ms Brooks was about to be thrown overboard?

The following morning it was reported that Rupert's daughter Elisabeth had told friends Ms Brooks had "fucked the company". The two friends suddenly appeared to have fallen out.

At 9.52am on Friday morning Ms Brooks was gone. Rupert Murdoch issued a head-in-hands apology to the family of Milly Dowler, the murdered teenager whose phone was hacked. Dow Jones chief executive Les Hinton, his friend of 50 years and the former chairman of NI who told Parliament in 2007 there was no evidence of widespread phone hacking, jumped ship later that day.

What had changed since Sunday, when Ms Brooks and Rupert Murdoch smirked their way past photographers as they went out to dinner in Mayfair, the 80-year-old tycoon declaring that "this one" – Ms Brooks – was his number one priority?

In truth, Ms Brooks's fate had been decided earlier. The News of the World had been axed in the hope of calming criticism, but to no avail. The mob was demanding that the Murdochs' bid for BSkyB be put on hold, at the very least. Despite this, the waves caused by the phone-hacking scandal in Britain had begun lapping on the American east coast, with the FBI announcing an investigation into claims that victims of 9/11 had been hacked.

The apparent arrogance of Ms Brooks and Mr Murdoch, who had just flown into the UK on the day that the News of the World had printed its final edition, caused dismay. But in private, Elisabeth Murdoch was putting pressure on her father to do something about Ms Brooks.

By Monday, this pressure was unrelenting. Again, it was the condemnation of Milly Dowler's family that was pivotal. A week after it had emerged that the girl's phone was hacked by the News of the World under Ms Brooks's editorship, the Dowlers called for her to resign as chief executive of News International. This focused minds and an urgent plan to stop the contagion from bringing down the entire Murdoch empire was drawn up.

On Tuesday, US-based public relations firm Edelman was called in by News Corp to help to deal with the crisis. Chase Carey, News Corp's president and chief operating officer, was also in London. Mr Carey, who spoke for key US investors alarmed at the plummeting share price, was instrumental in persuading Mr Murdoch to withdraw the bid for BSkyB, a move which caused shock when it was announced on Wednesday.

But neither Edelman nor Mr Carey was immediately involved in Rupert Murdoch's strategic response to the crisis. Mr Murdoch held a series of meetings with the same seven men who would map out the rescue plan. In public on Tuesday, the 80-year-old appeared frail as he hobbled round Hyde Park with his personal trainer, and in private it was at these meetings that these younger executives were managing the crisis for him.

At the key meetings, besides Mr Murdoch and his two sons, James and Lachlan, were: Joel Klein, a former aide to President Bill Clinton, News International general manager Will Lewis, Matthew Anderson, News Corp's group director of strategy and corporate affairs in Europe and Asia, NI PR chief Simon Greenberg and Jeff Palker, News Corp's European and Asian general counsel.

It was decided on Tuesday that Ms Brooks should go – it took until Friday for her replacement, Tom Mockridge, the head of Sky Italia, to be put into position. It was also clear that Les Hinton had to go because he was in charge of News International at the time. Adverts in national newspapers yesterday, apologising for the scandal, were lined up. There was a decision to establish a management standards committee to oversee good practice in News Corp. It will be independent of News International and run out of New York, overseen by Mr Klein.

But are these moves too late? This week, The New York Times plans to run a story about Ms Brooks's role in phone hacking, and she and Rupert and James Murdoch are to appear before the Culture, Media and Sport select committee on Tuesday.

Suddenly, Elisabeth Murdoch's role in the future of the company is now seen as the way to rescue the reputation of the Murdochs. News Corp insiders say that Rupert Murdoch wants to speed up plans for his 42-year-old daughter to join the board. Yet US investors want control to be handed to Mr Carey. Some are calling for James Murdoch to quit as News Corp deputy operating officer.

On Thursday, Prince Al-Waleed declared: "We hope that as things unfold the truth will come out." What is clear in this story is that nobody knows what will come out next.

The key players who's calling the shots

Elisabeth Murdoch She may have denied saying that Rebekah Brooks had "fucked the company", but Ms Murdoch is said to have played a major part in Ms Brooks's resignation. Ms Murdoch left the family business in 2000 to pursue her own ventures, but returned to the fold this year on selling her production company, Shine, to her father's empire. Ms Brooks's exit – and fears that her brother James's credibility may founder in front of MPs on Tuesday – bolster Ms Murdoch's position as heir to the News Corp throne.

Prince Al-Waleed bin Talal Delivered the shot that signalled that Rebekah Brooks's newspaper career was over. The remarks of News Corp's second-largest shareholder, in an interview with the BBC aboard his yacht in Cannes, broadcast on Thursday night, heralded her departure, which was announced the following day. The words, though measured, were telling: "If the indications are her [Brooks's] involvement in this matter is explicit, for sure she has to go, you bet she has to go." Within hours, she was gone.

Chase Carey Regarded as the ruthless business brain of News Corp, he is the man the company will look to, to steady the ship. The 57-year-old is now at the heart of News Corp for a second time, after overhauling its US television network Fox. As president, chief operating officer and deputy chairman, he is seen by many shareholders as guardian of their profits and a brake on Murdoch's more fanciful ideas. Some have already backed him rather than James Murdoch as their preferred successor to Rupert as chairman.

Joel Klein Since the former head of New York City's school system was unveiled as the internal investigator for Murdoch, Klein has been tight-lipped about his duties. But with his legal background – particularly running the US Justice Department's antitrust division under Clinton – he is a shrewd choice for the job. Many assumed he was choosing the easy life of the private sector when he joined News Corp last November. In fact, the 64-year-old will need all of the skills garnered in his long career as a Washington lawyer.

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