James Murdoch quits boards of UK papers - as fresh scandal hits empire

James Murdoch remains on the editorial board of 'The Times', which would approve any new editor

James Murdoch has resigned as a director of the companies which publish The Times, The Sunday Times and The Sun, documents filed with Companies House show. He stepped down from the boards of News Group Newspapers (NGN), publisher of The Sun, and Times Newspapers Ltd (TNL), which publishes The Times and The Sunday Times, in September. News Group Newspapers was the publisher of the now-defunct News of the World and could be the subject of legal actions arising from the investigation into phone hacking.

Mr Murdoch, 38, who resigned the posts after taking up a new position in New York with News Corporation, remains chairman of News International, NGN and TNL's parent company.

He remains on the editorial board of The Times, which would approve the appointment of any new editor. Mr Murdoch became executive chairman of News International in 2007 and has been called to Parliament twice to give evidence about the extent of his knowledge of phone hacking at the News of the World.

In Australia, police are investigating allegations that News Corporation's Australian arm offered a politician a "special relationship" and favourable coverage if he voted against changes to media laws.

Bill O'Chee, a former senator with the rural-based National Party, claims the offer was made in 1998 over lunch at an upmarket Brisbane restaurant, Pier 9. He says a senior News Ltd executive, Malcolm Colless, told him he would be "taken care" of if he opposed legislation opening the way for digital television.

By coincidence, Rupert Murdoch's eldest son, Lachlan, was at the same restaurant that day, dining with the then editor of the Brisbane-based Courier Mail, Chris Mitchell, who is now editor-in-chief of The Australian.

In a statement, News Ltd denied any improper conduct and said Mr Colless "has confirmed that no improper conversation took place". It added that neither the company nor Mr Colless had been contacted by police.

The story was broken by a rival newspaper group, Fairfax Media, which said it had seen a copy of Mr O'Chee's nine-page statement to the Australian Federal Police. In it, the former Queensland senator said he believed News Ltd was concerned about the legislation's impact on its Foxtel pay TV business.

The allegations came to light this year during a conversation at an airport between Mr O'Chee and an unnamed MP about the phone-hacking scandal.

The MP expressed doubt that an independent inquiry into Australian newspapers, ordered by the government this year, would uncover anything similar. Mr O'Chee then told him about the alleged incident.

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