David Cameron's dilemma: to stand by Rupert Murdoch – or to desert him

Clegg's criticism of News Corp adds to PM's problems ahead of vote on incendiary report

David Cameron is facing a political showdown over News Corp which could see Conservative MPs forced to vote on whether to censure three of Rupert Murdoch's senior lieutenants accused of misleading Parliament. The Prime Minister, who will have to account for his links with the Murdoch empire in an appearance before the Leveson Inquiry later this month, will be anxious to avoid confrontations which renew scrutiny of the Tory high command's relationship with News International.

But a motion will be tabled in the coming days asking MPs to endorse the findings of this week's report by the Culture Select Committee which found that three Murdoch executives – the News of the World lawyer Tom Crone, the paper's former editor Colin Myler and Les Hinton, a former chairman of News International – misled Parliament.

If the motion is recommended for debate, it will leave Conservative MPs having to vote on whether to back the committee's findings. The threat of a split in the Coalition over how to proceed against the Murdoch empire was increased yesterday when the Deputy Prime Minister Nick Clegg admitted there were "big questions" about News Corp and the fitness of Mr Murdoch to run it in the wake of the committee's finding that the mogul had shown "wilful blindness" to the hacking scandal.

Mr Clegg said: "There are very serious question marks about the basic accountability and corporate governance of an organisation in which, as we now know, journalists were abusing the privacy of ordinary people and flouting the law in a sustained way."

The Liberal Democrat leader's comments were in stark contrast to the tone struck by his cabinet colleague William Hague. The Foreign Secretary went out of his way to praise Mr Murdoch as part of a coterie of newspaper proprietors who are "great business people".

It remained unclear what sanction, if any, the parliamentary authorities might be able to apply against the three former NI executives despite the conclusion of the committee that they had committed a contempt of Parliament by failing to disclose their knowledge of crucial aspects of the hacking scandal.

Paul Farrelly, a Labour member of the Culture Select Committee, said he hoped the report would be used as an opportunity to introduce a meaningful deterrent against witnesses who mislead Parliament. He said: "We are in uncharted territory here."

In a statement, the clerk of the House of Commons said it would fall to the Committee on Standards and Privileges to decide whether the three men were guilty of contempt and what action should be taken.

Leveson may drop second part of inquiry

Lord Justice Leveson's report on Britain's press could be more hard-hitting than expected after hints he may drop a part of his inquiry scheduled to probe criminal wrongdoing at News International.

So far the Leveson Inquiry has taken a cautious approach to witnesses for fear of prejudicing future criminal cases.

The second part – expected later next year, after any trials related to hacking – was to explore criminal activity at Wapping and on Fleet Street. But a new ruling from Leveson suggests this could be dropped and the current part be taken as far as it can to avoid delays. This was interpreted as increasing the likelihood of a more robust report later this year.

James Cusick

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