The day Labour turned on Murdoch
By Ian Dunt Follow @IanDunt
The relationship between Labour and Rupert Murdoch changed significantly today, as parliamentarians took it in turns to attack the media mogul with a ferocity unheard of in recent British politics.
The comments came as the prime minister announced full public inquiries into the morality of the press and the relationship between newspapers and the police.
However, he refused to back calls for the resignation of Rebekah Brooks, chief executive of News Corp's British operating arm News International, or to pause the decision over the BSkyB takeover.
"We have let one man have far too great a sway over our national life," Labour MP and former minister Chris Bryant said, referring to the extent of Mr Murdoch's media ownership in the UK.
"At least Berlusconi lives in Italy. Murdoch doesn't even pay tax here. America, the home of the aggressive entrepreneur doesn't allow it. We shouldn't."
Mr Murdoch owns four national newspapers – the Times, the Sunday Times, the Sun and the News of the World. He is currently seeking permission to purchase BSkyB.
Mr Bryant added: "We live and die by what they [the media] show. We have let the PCC [Press Complaints Commission] delude us into thinking it is genuinely independent."
Fellow Labour MP Tom Watson used parliamentary privilege to cite new evidence which he said proved that News International "has entered the criminal underworld".
He ended with a robust attack on Rebekah Brooks, chief executive of News International, and James Murdoch, chairman of News Corp.
"In the world of Rebekah Brooks no-one can cry in private, no one can weep without surveillance," he told the Commons.
"I believe James Murdoch should be suspended from office while the police investigate."
Even seasoned New Labour veterans like Alan Johnson, who built their campaigning strategy on positive relations with Murdoch's media empire, were willing to publicly criticisethe mogul.
The attack was led by Labour leader Ed Miliband, who enjoyed one of his most widely-praised PMQs performances.
He accused the prime minister of being "out of touch with millions of people" if he thought it was acceptable to allow the BSkyB decision to take place while the company was under investigation by the police.
"He hasn't shown the leadership necessary on BSkyB, he hasn't shown the leadership necessary with News International," Mr Miliband said.
"He made a catastrophic error of judgement by bringing Andy Coulson into the heart of his Downing Street machine."
In a gripping PMQs exchange, a visibly nervous Mr Cameron replied: "I take full responsibility for everyone I employ, for everyone I appoint, for everything this government has done.
"I feel so appalled by what's happened. That's why it's important there's a full police investigation."
The developments follow reports about News of the World journalists hacking the voicemail messages of bereaved families, which has now extended to those who died in the 7/7 bombings.
The families of all high-profile murders committed in recent years are now understood to be on police contact lists, after the relatives of Holly Wells, Jessica Chapman and Milly Dowler were contacted over alleged hacking.
Graham Foulkes, whose son David died in the 7/7 bombings, said he had been contacted by officers after they found his landline and mobile phone numbers in the records of private detective Glen Mulcaire.
The shock to the families of the 7/7 bombings will be particularly damaging, as they prepare to mark the sixth anniversary of the bombings tomorrow.
The scandal was once viewed by Downing Street and News Corp as something which was of interest only to media professionals and middle-class liberals.
But it has now become significantly more morbid and serious, as have its political implications.
The News of the World seemingly tried to consolidate Ms Brooks' position yesterday by releasing details of payments made by Mr Coulson to senior police officers between 2003 and 2007.
"As a result of media enquiries, it is correct to state that new information has recently been provided to the police," it said in a statement.
The news was confirmed by the police, who said an investigation had started by the Independent Police Complaints Commission (IPCC).
As News Corp shares fell significantly upon the opening of the New York Stock Exchange, Rupert Murdoch was forced to issue a statement condemning the hacks as "deplorable and unacceptable".
He insisted that Ms Brooks had his backing, however, saying: "I have made clear that our company must fully and proactively cooperate with the police in all investigations and that is exactly what News International has been doing and will continue to do under Rebekah Brooks' leadership."
The decision to hand police information on Mr Coulson is the first instance of a split at News of the World, which had previously held the firm line that phone-hacking was the work of one rogue reporter. It suggests that senior figures at the company are now prepared to sacrifice Mr Coulson if they think it can save Ms Brooks.
Such a development is problematic for Mr Cameron, because everything said against Mr Coulson reflects on his judgement, due to his decision to hire him as a communications chief for the Conservatives and later Downing Street.
The newspaper faced significant financial loses yesterday after a string of high-profile companies, including Ford, npower, Halifax, T-Mobile and Orange, announced that they would review of cancel their advertising with the News of the World.
Several other companies, including Vauxhall and the Co-operative, joined the list today.
In what is rapidly becoming the biggest crisis in Mr Murdoch's career since the Wapping strike, he may even face losing his battle to gain control of BSkyB.
The government had previously managed to keep the two issues apart, saying the BSkyB decision, which is being considered by media secretary Jeremy Hunt, is based solely on "media plurality".
But reports yesterday suggested that media watchdog Ofcom can examine whether News Corp chief executives are "fit and proper persons" to own BSkyB.
MPs today called for the process to be paused while the row goes on, a demand which the government initially rejected. Media secretary Jeremy Hunt, who was at the Commons debate, can still decide to hold back any final decision while detractors make their views plain, however.
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