One shocking revelation – and the paper was gone

168 years to make The News of the World, and three days to destroy

The week began like any other: as Britain awoke to a warm summer's morning, 7.4 million readers of the News of the World devoured the latest details of Cheryl Cole's private life. Last night, journalists at the 168-year-old newspaper filed their last scoops. Here is the inside story of seven days when the three pillars of democracy – police, politics and the media – were shaken to their cores.

Sunday: The War Prime Minister

The News of the World carries its usual melange of scoops, gossip and campaigns that has made it Britain's most successful newspaper. Inside, a story reports new rules to help the families of murder victims, such as the parents of Milly Dowler, to "protect their privacy". This report is about to become grimly ironic.

Three thousand miles away, David Cameron is in jovial mood as he flies into Afghanistan for a trip to announce a rare good news story: around 500 troops would be withdrawn from the country by next summer. Normally the Prime Minister, like his predecessors, would fly in the first-class luxury of a commercial aircraft before transferring to a military plane to show solidarity with the forces. This time, the travelling party flies all the way on a C-17 transport aircraft, creating an all-in-this-together atmosphere. Shouting over the roar of the engines, he jokes with journalists struggling to sleep in the vast hold that he is in the posh quarters, "sleeping with the head of the Army". In fact, he has little sleep, instead talking to his communications chief, Craig Oliver, and chief of staff, Ed Llewellyn.

Monday: Hacking of Milly Dowler's phone revealed

After an all-night flight, the Prime Minister's C-17 touches down in the dusty heat of Camp Bastion. Within minutes of his arrival, news breaks that 21-year-old Scott McLaren, a soldier from 4th Battalion, the Royal Regiment of Scotland, is missing. Rumours about his disappearance sweep through the camp and the bleary-eyed Downing Street entourage and press pack. The search for the missing Highlander forces a visit to Helmand's capital, Lashkar Gah, to be called off.

At 4.30pm UK time, The Guardian publishes online a story that the mobile phone of murdered teenager Milly Dowler was hacked by the News of the World after she disappeared in 2002. To make matters worse, whoever was accessing her voicemail deleted messages left by panic-stricken friends and family, giving her loved ones false hope that she might still be alive. Oliver, Coulson's successor as director of communications, takes a call from Downing Street and breaks the news to the PM. Cameron, the devoted father, is "hot with anger" at such an intrusion into grief. News then comes that the missing soldier has been murdered. The PM and his party fly by C-130 Hercules to Kabul. It is a difficult journey. Back in Britain, the evening news bulletins lead with the Milly Dowler phone-hacking story. Nine years after her death, the teenager's name forces the hacking story on to the front pages of every newspaper for the first time.

Tuesday: Cameron's anger at "shocking" revelations

After catching up on sleep at the British embassy in Kabul, Cameron wakes to find himself on a foreign trip hijacked by a big domestic story. The PM holds talks and a press conference with President Hamid Karzai. Shaded by vast pine trees at the presidential palace, Cameron seems genuinely shocked at the "really appalling", "truly dreadful" and "quite shocking" allegations.

Back home, staff at the News of the World arrive for the start of what they believe to be another ordinary working week. On the second floor of News International headquarters in Wapping, east London, journalists from the tabloid gather in the glass-walled office of their editor, Colin Myler, for their weekly conference.

The phone-hacking scandal has cast a cloud over the team for months, with former and current journalists arrested, desks searched and notebooks seized. But this Tuesday, the Guardian splash has further darkened the mood in the newsroom. Journalists who had nothing to do with hacking are horrified at the thought of the murdered teenager's voicemails being listened to. One reporter says: "Can it get any worse than this?"

Outraged by the thought of Milly Dowler's phone being hacked, a huge online campaign begins, and quickly takes on a life of its own. Twitter, Facebook and Mumsnet users bombard big-name advertisers, with accounts worth millions of pounds a year to News International, demanding they withdraw from Sunday's News of the World. Ford is the first to pull its ads, with other firms including npower, Halifax, T-Mobile and Orange announcing a review of their association with the newspaper. It is the first sign of the crisis hitting Murdoch where it hurts – on the bottom line. The scandal has entered a new – and potentially devastating – phase.

In the News of the World newsroom, one journalist predicts the Milly Dowler revelation means Rebekah Brooks will be "gone in 48 hours". The tabloid had, countless times, called for those in charge of businesses and government departments which had erred to resign. It was assumed she would follow suit. Brooks sends a statement to staff, saying she is "sickened that these events are alleged to have happened", but shows no sign of heading for the door, instead vowing to "vigorously pursue the truth".

That evening, the PM's C-17 makes its nine-hour journey home. Cameron spends most of the time in close talks with officials. Oliver, his press chief, tries to gauge the seriousness of the latest revelations. Weary journalists agree it is looking bad for News International.

In Britain, another story breaks – one that signifies how Rupert Murdoch's empire is ruthlessly moving against people deemed expendable. The BBC's business editor, Robert Peston, appears in the Ten O'Clock News studio to declare that emails show evidence that News of the World paid police officers for information, and that Andy Coulson had apparently authorised this.

Peston – known to be friendly with Will Lewis, a senior News International executive working closely with Brooks – quotes "sources" at the company to say they have passed the emails to police. The message is clear: Coulson, a friend of Brooks for more than a decade, is now a marked man. It causes shockwaves in the Coulson camp.

In London, Nick Clegg, sensing a political storm, sends Cameron an email making clear a full inquiry is now needed, led by a senior judge.

At 10.30pm the PM's plane lands at RAF Brize Norton.

Wednesday: Soham schoolgirls' parents were hacked

The morning papers bring more devastating claims – the phones of the parents of the Soham murder victims Holly Wells and Jessica Chapman may have been hacked; families of victims of the July 7 bombings were targeted; and George Osborne is told his phone details were held by Glenn Mulcaire, the News of the World private investigator jailed in 2007 over hacking.

As Cameron's team gather to prepare for Prime Minister's Questions, Cameron and Clegg meet to agree a position. Clegg repeats his call for an inquiry to be headed by a judge. Although the PM is aware of the severity of the crisis, he seems slow to act in public. His reluctance also appears to be down to his close relationship with key people at News International – chiefly, Rebekah Brooks. "We have been 24 hours behind on this story all week," says one No 10 source. "Because it's News International."

At PMQs Ed Miliband starts with a softly-softly approach, but soon turns to Rupert Murdoch's planned takeover of BSkyB, saying this should be referred to the Competition Commission, to provide "breathing space". When Cameron insists his government was simply following "correct legal processes", the Labour leader pounces, accusing him of being "out of touch with millions of people".

Miliband then calls for Brooks to "consider her position" and brings the firestorm to the steps of No 10, saying the Tory leader made "a catastrophic judgement in bringing Andy Coulson into the heart of his Downing Street machine". It is the best attack of his leadership so far.

At 1.40pm, Miliband is ready for the start of an emergency phone-hacking debate, secured by former minister Chris Bryant, himself a victim of hacking. During the debate, Labour MP Tom Watson uses parliamentary privilege to accuse NI of entering the "criminal underworld" by "paying people to interfere with police officers and doing so on behalf of known criminals". Watson also claims that James Murdoch has "personally, without board approval, authorised money to be paid by his company to silence people who had been hacked and to cover up criminal behaviour within his organisation".

In Wapping, the sense of crisis is building. With more and more firms threatening to pull advertising, Colin Myler, the normally diplomatic editor of the News of the World, holds a fraught meeting with his boss, Brooks, over the reputational damage the scandal is causing the paper. He confronts her, suggesting a senior executive at News International should carry the can, although he does not tell Brooks directly that she should stand down.

In talks with James Murdoch, Rupert's youngest son and chief executive of News Corp Europe and Asia, the issue of Brooks resigning comes up, but is ruled out.

Later that afternoon, Murdoch Snr issues a statement saying the allegations are "deplorable and unacceptable" but NI will continue under Brooks's leadership.

Thursday: Goodbye, cruel world

As rumours swirl about who will pull support from the newspaper next, it emerges that the Government has received 158,000 submissions to the consultation on BSkyB – mostly against and all but a handful in the past week. Jeremy Hunt, the Culture Secretary, is forced to delay the decision until the autumn.

The Royal British Legion announces it is to sever its ties with the NOTW – a blow for the newspaper's campaigning journalism. Watson, who has doggedly pursued the hacking scandal for nearly two years, boards a train from London King's Cross to Glasgow. He is on his way to meet Aamer Anwar, the lawyer of Tommy Sheridan – serving a three-year jail sentence for perjury over his 2006 defamation action against the News of the World. At the perjury trial, Coulson, on oath, said he had no knowledge of hacking or other illegal activity while he was editor of the newspaper. Watson, armed with the Peston story about Coulson's alleged role in authorising payments to police, says he has a dossier to pass to Strathclyde Police.

In Wapping, there is another confrontation between Myler and Brooks. News of the World staff look on as Myler, in his glass-walled office, stands up and can be heard shouting, before Brooks quickly leaves. Supporters of Myler – whose daughter Katie worked on Ed Miliband's leadership team – say he is dismayed that Brooks, Lewis and Simon Greenberg, NI's director of corporate affairs and until now the public relations face of the company's response to the crisis, had been undermining the product.

David Cameron's closest advisers are in Downing Street for one of their regular meetings – but it is overtaken by the crisis. Many in the room had become close with Coulson before he resigned in January. Gabby Bertin, the PM's press secretary, snaps at one point: "I know Andy didn't know anything about this." Says a source: "People who worked with Andy are still super-super-loyal to him. They are basically in denial."

David Wooding, the News of the World's chief political editor, reads news on his BlackBerry that the Government is to delay its decision on News Corp's takeover of BSkyB. It feels like an extra harbinger of bad news. Wooding returns to the Palace of Westminster, bumps into a friendly MP, and over two glasses of Sauvignon Blanc they discuss possible stories the News of the World could cover in the next few weeks. Wooding has no idea that those stories would never be seen in the pages of his newspaper.

Across the Atlantic, at the Allen and Co Sun Valley Conference in Idaho, 80-year-old Rupert Murdoch looks irritated to be doorstepped by journalists. Crossing the golf course where the conference is being held, he is surrounded by photographers, reporters and TV cameras. A reporter introducing herself as "Jessica from The Wall Street Journal" – the jewel in the Murdoch crown – asks him how he could continue to support Brooks in her role. A reporter from Fox News, also in the Murdoch empire, thrusts a microphone in his face. Murdoch Snr, stooped and crumpled with age, looks like one of the unfortunate "punters" his tabloids love to hunt down. But, unbeknown to his journalists, he is about to reassert his power in the most shocking way.

At 4.15pm in Wapping, News of the World staff are suddenly asked to gather for a speech by Myler and Brooks. Two security guards hover nearby. One staffer says: "She started by saying she had a statement from James Murdoch, but wanted to say a few words herself. We thought she was going to resign. Then, as she went on, it became clear that it was more serious than that."

Dressed in leopard print, Brooks speaks with a "nervous" voice about her love for the paper she edited for three years. Then she drops the bombshell: the paper is no more. Staff are incredulous that she does not resign.

Myler, who had been told of the decision just 20 minutes earlier, asks Brooks to leave so he can speak to his staff alone. Tearful and angry, he tells his colleagues it is the saddest day of his career, but they should "hold their heads high". Myler tells staff Brooks offered her resignation twice, later denied. Someone shouts: "We'll accept it" and a loud cheer goes up.

At 4.33pm, an email from James Murdoch lands in the inboxes of all NI staff. Murdoch Jnr's email is long, admits that the company may have not given the full facts to Parliament, and claims that he had been kept in the dark about murky practices. It is only at the end that the shock news becomes public: after 168 years, this Sunday's News of the World would be the last. To borrow a phrase often used to describe some of the more sensational News of the World scoops, this was a "marmalade dropper".

Up to 250 jobs could be lost to save the skins of Brooks and the Murdochs. There is immediate speculation that The Sun could be run as a seven-day operation, and that the newspaper was axed to ease the BSkyB takeover.

Deputy Assistant Commissioner Sue Akers, in charge of Operation Weeting, the investigation into phone-hacking, announces 4,000 names were on Mulcaire's target list.

That evening, news leaks that Coulson is to be arrested the next day. The crisis is inching closer to the Prime Minister, and it is time for him to act.

Friday: Cameron aide under arrest

Shortly after 6am, the NOTW's former royal reporter, Clive Goodman, jailed alongside Mulcaire for hacking, is arrested.

After a week of catching up on the story, at 9.40am the PM tries to seize the initiative by holding a press conference at Downing Street. He makes concessions – including agreeing to appoint a judge to oversee the public inquiry. Cameron says: "It is on my watch that the music has stopped."

There is more. In a sign that his close friendship with Rebekah Brooks has been changed irreversibly by the week's revelations, he says he would have accepted her resignation if he were James Murdoch. He says Murdoch Jnr has "questions to answer".

Cameron hints that he is siding with Coulson over News International's treatment of the former editor. Suggesting that Brooks has hung Coulson out to dry, he says: "He became a friend and is a friend."

Shortly after the press conference finishes, at 10.30am Coulson turns up at Lewisham police station in south London and is arrested – over hacking but also over payments to police officers. Officers take fingerprints and DNA swabs. While he is held for nine hours, his £1.3m home in nearby Dulwich is searched, and documents and a computer are seized.

At 11am Simon Hughes, the Lib Dem deputy leader, delivers a letter to Ofcom asking whether BSkyB under News Corp ownership would be "fit and proper" to hold a broadcasting licence.

At 4pm, Brooks returns to the News of the World newsroom for another highly charged showdown with staff. She pays tribute to journalists who she says are "talented and untainted". There is also a hidden message back to Cameron, who has called for her head to roll: she is going nowhere. She claims as many jobs as possible will be saved, and insists she is staying on because she's a "conductor" for the crisis and has "visibility" of further revelations. In a year's time they will understand why this happened, she adds, cryptically, but the brand is toxic. This triggers the anger of some present, who accuse her of "arrogance". Brooks adds that she will no longer be in charge of the internal NI investigation into hacking.

At 7.30pm in Lewisham High Street, Coulson is released. He hints that he is ready to take revenge on his former NI bosses: "There's a lot I'd like to say but I can't." In an increasingly feverish atmosphere, word spreads through Wapping that the paper's closure had been planned since as long ago as November.

Saturday: Murdoch to fly in

Colin Myler leaves his central London home on his way to edit the final edition of his paper, describing colleagues as a "wonderful team of journalists".

News filters in from New York that Rupert Murdoch is to fly to Britain on Sunday to take control of the scandal. With Cameron warning that James Murdoch has questions to answer, there are fears that the toxicity of the hacking scandal could seep into Murdoch's treasured US media brands.

The name of Les Hinton – chief executive of The Wall Street Journal and former News International chairman who told Parliament the hacking scandal was confined to one reporter and one private investigator – is also in the frame.

Back in Wapping, scene of the greatest drama in British journalism a quarter of a century ago, when Murdoch ruthlessly cut his newspapers free from the print unions, News of the World journalists prepare their final scoops.

And, at 6pm, Colin Myler leads his staff out of the building and the 168-year-old newspaper is declared dead.

How Ed Miliband found his voice

The dramatic escalation of the hacking scandal in recent days has brought disastrous consequences for News International and put the police and the media under the spotlight. But it has also had a huge impact on the politicians who are attempting to contain the firestorm.

The Prime Minister has struggled to plot a safe course through the crisis, and he has found himself under unwelcome pressure from his own deputy, the Liberal Democrat leader Nick Clegg, over how far to move and how fast.

But it is the onslaught David Cameron has faced from his Labour opponent that has been the most dramatic political development of the past week.

Ed Miliband had determinedly remained on the edges of the hacking debate since before he became Labour leader, keenly aware that a media giant controlling almost 40 per cent of the British press would make a dangerous adversary. He had never used the word "hacking" in Parliament – until last week, when he faced Mr Cameron over the despatch box. In a treacherous area, which his predecessors sought to avoid, Mr Miliband has finally found a voice.

The official motivation for the transformation was the revelation that Milly Dowler's telephone had been hacked into, which Miliband aides maintain was "a qualitative difference" from previous disclosures. The change of tack was confirmed early on Tuesday, in a statement condemning the "cruel and immoral act". The Miliband camp presents the transformation almost as a moral response, rather than a strategic move. Yet the attack at Prime Minister's Questions, particularly over the hiring of Andy Coulson, fulfilled a political requirement: to place his opponent at the heart of the crisis and raise profound concerns over his behaviour.

Moreover, The IoS understands that his call for Rebekah Brooks to "consider her conscience and consider her position" came after a source inside News International told him that the chief executive's future was uncertain. The change in stance towards News International has aligned the Labour leader with public sentiment – as well as his own party, jaded by New Labour's pursuit of approval from the Murdoch empire.

However, several of Mr Miliband's senior colleagues fear he has gone too far – and should have trained his fire just on Mr Cameron.

Mr Clegg has also attracted criticism for going easy on Mr Cameron, despite criticising Mr Coulson before the election and having private doubts about allowing him into Downing Street.

The Lib Dem leader's aides insist he has disagreed with Mr Cameron, and influenced decisions, including the appointment of a judge to head the inquiry into phone-hacking. But, in contrast, other Lib Dem cabinet ministers are champing at the bit.

A source close to the Energy Secretary Chris Huhne, who led the charge against Mr Coulson, said: "He is trying not to say 'I told you so' but he was the one person who was going on this quite hard while Labour cosied up to Murdoch and Coulson was working for Cameron."

Last night, Tim Farron, the Lib Dem president, called the PM's decision to hire Mr Coulson a "stain on the Government".

He said Mr Cameron had "many questions to answer", in particular over the assurances he sought before taking the former editor into No 10.

Fearing that the Lib Dems may be contaminated by the fall-out, Mr Farron insisted: "We are not all the same, not inside the Government or outside it... What David Cameron, Tony Blair or Gordon Brown knew about the practices of the newspapers they sought to curry favour with, no one knows, but they certainly didn't waste much energy finding out," he wrote in an article for The IoS.

Matt Chorley and Brian Brady

Bribery inquiry: Police under spotlight as more arrests planned

Scotland Yard detectives investigating the News of the World phone-hacking scandal are set to make further arrests this week. The raids, part of the ongoing Operation Weeting, will see several more journalists employed by the newspaper questioned by officers.

Their names appear in files seized at the home of Glenn Mulcaire, the private detective employed by the newspaper to obtain phone and other confidential material. Mulcaire was jailed for six months at the Old Bailey in 2007 for intercepting the phone records of royal aides.

The records, which will be released to lawyers acting for victims targeted later this month, show the names of the journalists who tasked Mulcaire. It is understood they show that the Murdoch tabloid was not Mulcaire's only newspaper customer. Five former journalists at the paper have already been arrested.

Yesterday, NOTW staff said they were told to expect police to arrive at 3am today as part of the investigation. They said they were told their work email accounts would also stop working. They understood the police would be taking photographs of all desks to make a record of any computers and files in case any were removed. Staff said they were expected to leave their notepads behind for the police. A Metropolitan Police spokesman refused to confirm or deny this information.

Further arrests in a separate but related inquiry into bribes paid by the NOTW to serving police officers are also expected. Scotland Yard said a 63-year-old man, believed to be a private investigator, arrested at his Surrey home on Friday night in connection with Operation Elveden, the codename for the bribes inquiry, had been bailed to return in October. His arrest followed the re-arrest of Clive Goodman, the paper's former royal editor, in connection with unlawful payments to police. The inquiry was launched after emails supplied by News International (NI) showed that up to four police officers had been paid up to £100,000 by the newspaper. Former editor Andy Coulson was questioned about authorising payments, at Lewisham police station, south London on Friday.

NI chief executive, Rebekah Brooks, told MPs in 2003 that journalists had paid money to officers for information. She later insisted she had been speaking about the newspaper industry in general rather than the NOTW specifically.

A third police inquiry is also probing allegations that Jonathan Rees, another private detective employed by the paper, had also paid money to serving officers.

Scotland Yard officers are expected to face tough questioning about their handling of the scandal when they appear before MPs on the Home Affairs Select Committee next week. Andy Hayman, who led the initial investigation, will face questions about why police failed to warn victims on Mulcaire's list that their phone messages may have been intercepted. Hayman, a former Met Assistant Commissioner, retired after securing the convictions of Mulcaire and Goodman, but has been criticised for subsequently accepting consultancy work for NI.

Former journalistic sources at the newspaper have revealed that corrupt officers hid their activities by abusing the confidential informant (CI) system. Confidential information requested by journalists was obtained by officers from the Police National Computer. They justified the searches by attributing them to information received from informants registered under the CI system. They then handed information to reporters or intermediaries in return for brown envelopes of cash. A McDonald's near the newspaper's Wapping print plant in east London was used for exchanges.

Andrew McCorkell

Americans gripped by Murdoch's British debacle

Nowhere is the crisis engulfing Rupert Murdoch's UK operations being more avidly followed than in America. And the question being asked is: could the sickness spread to his even larger media interests in the US, where News Corporation has its headquarters?

The lurid drama in London has been huge news here all week (and even in some of outlets owned by Mr Murdoch). His print arch-rival, The New York Times, whose dominance he explicitly sought to break when he bought The Wall Street Journal in 2007, has been feasting on the scandal, devoting coverage to match the Arab Spring uprisings and the Japanese nuclear disaster.

And there are obvious similarities between Mr Murdoch's positions in Britain and the US: in both, he owns major newspapers, serious and tabloid, as well as large cable TV interests, and he wields political influence. And the allegations of criminal behaviour in the British subsidiary of a US corporation could be picked up by the authorities here in Washington.

But Murdoch in America is not the same as Murdoch in Britain. Power lies in the perception of power. As Britain's largest newspaper proprietor, he has been credited with the ability to make and break governments. In the US, too, he is a big fish, but in a larger pool.

The WSJ may be the biggest-circulation US paper, but it operates in a fragmented market. Murdoch's New York Post is the closest equivalent to a British tabloid – indeed, it is being sued by the chambermaid involved in the Dominique Strauss-Kahn case for claiming that she was a prostitute. But compared to the soon-to-be-defunct News of the World, the Post is a pussy-cat. Nor does he command among politicians here the fear and awe he has in Britain – at least until this week. Mr Murdoch can't breeze into the White House as he can at Downing Street and Chequers; nobody believes that an editorial in the WSJ or the Post will decide who's going to be the next president. The US is far more politically polarised than Britain. Mr Murdoch is regarded merely as the latest in a long line of right-wing press barons. His papers, it is assumed, will reflect his conservative views – just as everyone expects The New York Times or The Los Angeles Times to carry the liberal standard.

Here, in contrast to Britain, his political influence derives not from newspapers but television – above all, in the Fox News cable channel, "fair and balanced" according to its slogan, but slanted to the right to an extent unimaginable on Sky in Britain. At one point, President Obama refused to be interviewed by Fox, and his staff tried, unsuccessfully, to ban it from the White House press pool, as a senior Obama official described the network as the "communications arm of the Republican party".

As with newspapers, Mr Murdoch swims in a larger TV pool here. Fox is but one of four traditional networks alongside ABC, CBS and NBC, while Fox News competes in a partisan cable news industry with the liberal-leaning MSNBC and CNN, whose attempt at "neutrality" has cost it dear in the ratings. Mr Murdoch's real power is as a potential Republican kingmaker. Several of the party's 2012 candidates have worked for Fox. None of the others dare offend it when the blessing of Fox could decide who emerges victorious from the primaries.

And there the Murdoch debacle in the UK is relevant. "Will the conservative contenders be willing to attack the [Murdoch] empire?", the left-leaning magazine The Nation asked. "Would a conservative president be willing to hold it to account if the abuses now under scrutiny in Britain were exported to other lands?" Indeed.

Rupert Cornwell

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