NEWS OF THE WORLD HACKING SCANDAL:MAJOR COMPANIES such as Halifax Bank, Virgin Holidays and the Co-Operative have decided to stop advertising with the News of the World, as the controversy about its interception of voicemail messages threatened the newspaper's finances.
During an extraordinary day, politicians, led by prime minister David Cameron and Labour leader Ed Miliband lined up to condemn the embattled Sunday tabloid — the newspaper whose approval most had desperately sought in the past.
Now, the issue is whether the deepening crisis will derail Rupert Murdoch’s NewsCorp’s long-desired plans to take over the 61 per cent share of UK satellite broadcaster BSkyB that it does not already control. Mr Cameron desperately wants to avoid being the one to block the deal.
Describing the News of the Worldas "deplorable and unacceptable", Mr Murdoch ignored repeated calls from MPs during a three-hour debate in the House of Commons for the resignation of News International's chief executive, Rebekah Brooks.
“I have made clear that our company must fully and proactively co-operate with the police in all investigations and that is exactly what News International has been doing and will continue to do under Rebekah Brooks’s leadership,” he said.
Culture secretary Jeremy Hunt’s final round of consultation on the BSkyB deal will finish on Friday, but it is not yet clear if he will go ahead and offer final approval for it before the parliamentary recess later this month, as had been expected.
In the Commons, Mr Cameron promised a number of inquiries, but he insisted that they could not take sworn public evidence until after the police investigation has ended if hopes for possible prosecutions are not to be jeopardised.
Ministers argue that they do not have freedom to block the BSkyB deal at this stage, while TV regulator Ofcom said that it has “a duty to be satisfied on an ongoing basis that the holder of a broadcasting licence is fit and proper”.
However, there seems little sign that Ofcom is getting ready to move, particularly since it said that it is not for it to “investigate matters which properly lie in the hands of the police and the courts”.
Equally, however, senior Commons figures last night privately said that the public would not accept that the takeover could be given the go-ahead in coming weeks when News International faces such serious allegations.
Some of the advertisers who pulled away yesterday on foot of Ford's lead late on Tuesday threaten to inflict serious damage on the tabloid's £40m annual advertising revenues — money that is badly need to prop up News International's loss-making title, the Times.
Worryingly, some of the companies, notably the Co-Operative, have withdrawn on foot of pressure from members and social media campaigners, while Vauxhall has opted to hold off on advertising until the police investigation ends.
Electricity company, Npower was the latest to quit last evening.
Former Labour home secretary Alan Johnson said the Metropolitan Police had been "evasive, dishonest or lethargic" in their dealings with him when he raised questions about the original allegations against the News of the Worldfor hacking into messages left by members of the royal family.
Labour MP Tom Watson, who has led much of the campaign against the News of the World, said Ms Brooks and Mr Murdoch's son James were 'not fit' to be in charge of a major media company and should be removed.
Indeed he went so far as to claim that Mr Murdoch jnr “personally approved” of a bid to cover up the scandal.