Less than a month after his father Rupert's 80th birthday, James Murdoch is returning to New York in a newly created, powerful role. The appointment appears to confirm that the fourth of the media mogul's six children is the chosen successor as head of the News Corporation empire.

At the age of 38, James has been given the title of deputy chief executive officer, chairman and CEO, International, of News Corp, which effectively means that he will be the third most important figure in the organisation.

James's promotion reflects Murdoch Snr's desire that News Corp remain a family operation.

As one source said last night: "Rupert can do what he likes."

Yesterday News Corp sources in London were anxious to give the impression that little had changed, with James retaining control of News Corp in Europe and Asia, meaning that he is still in charge of News International, publisher of the company's British newspapers.

He will also retain his position as non-executive chairman of the satellite broadcaster BSkyB.

But all this means that James Murdoch will be relocating to America at a time when News International is beset by problems concerning the ongoing scandal of phone-hacking by journalists at its Sunday tabloid, the News of the World.

News Corp's purchase of BSkyB is also at a critical juncture, with the board on the verge of deciding what price to pay for the 61 per cent of shares which News Corp does not already own.

Some observers have not been impressed with James's handling of the British newspaper business, which he took over in 2007.

On Tuesday, on the eve of the announcement of the new role, News International released new figures which it claimed showed that the company's introduction of a paywall for the websites of The Times and The Sunday Times had been successful in increasing digital revenues. But print sales of The Times have suffered a steady decline.

Rumours have been circulating for some time that James, who went to school in New York and is married to a New Yorker, wished to return to America.

The move will take him out of the line of fire as MPs continue to demand answers on the extent of the phone-hacking activities at News International.

One source last night compared James's relocation to "an SAS operation to remove a hostage from a vulnerable situation".

Some believe that Rebekah Brooks, who is now the most senior News Corp figure based in London and admired greatly by Rupert Murdoch, may also be considered for an American-based role, though that would compound a power vacuum that may already emerge at Wapping with James's frequent absence.

Loyal News Corp figures say the new job is simply an extension of James's role and that over the past 18 months he has spent much time away from London visiting News Corp operations across Europe and Asia.

"You shouldn't think of this as him fleeing London, never to be seen again," one insisted.