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News Corp. Withdraws Its Bid For British Sky Broadcasting

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Newscom

According to Mark Kleinman, city editor for Sky News, News Corp. won't be able to re-bid on BSkyB for at least six months. But he said that News Corp. will keep its 39% share in the company, which is Britain's main satellite network.

The move comes amid allegations that employees working for publications of the U.K. branch of News Corp, News International, hacked into the phones of as many as 4,000 people, including those of murder victims and terrorism victims. News Of The World, a News International tabloid, was shuttered this week amid the allegations. Two other News International publications are accused of targeting the phone, bank, and medical records of former Prime Minister Gordon Brown for a period of ten years.

News Corp. announced its plans shortly after Prime Minister David Cameron called on News Corp. to drop its bid for the network, saying that the company "should not be focused on mergers and takeovers, but on clearing up the mess and getting their house in order." The House of Commons was also scheduled Wednesday to vote on a motion declaring that "it is in the public interest for Rupert Murdoch and News Corporation to withdraw their bid for BSkyB."

Earlier on Wednesday, Cameron announced a public inquiry into the scandal that will be led by Lord Justice Leveson, and that will focus on "wrongdoing in the press and the police, including the failure of the first police investigation," as well as "review of regulation of the press." The inquiry will be able to summon witnesses -- "including newspaper reporters, management, proprietors, policemen and politicians of all parties" -- to testify under oath.

Murdoch has been summoned by the Department of Media, Culture and Sport Committee to testify next Tuesday.

On Wednesday Cameron also defended his decision to appoint his former communications chief Andy Coulson, previously a News Of The World editor. The Guardian says it tipped off Cameron that Coulson had hired a freelance private investigator with a history of corruption, who was at the time facing charges for axe murder. "All these questions relate to the fact that I hired a tabloid editor," Cameron said. "I did so on the basis of assurances he gave me that he did not know about the phone-hacking, he was not involved in criminality."

"He gave those self-same assurances to the police, to a select committee of this House and under oath to a court of law," he continued. "If it turns out he lied, it won't just be that he shouldn't have been in government, it will be that he should be prosecuted."