BSkyB chairman James Murdoch, under fire over his handling of a phone hacking scandal that forced the closure of Britain's top-selling Sunday newspaper, is to step down from his role at the country's dominant pay-TV company.

Mr Murdoch confirmed today he would step down as chairman, in a bid to protect the group from being damaged by the phone hacking scandal.

"I am aware that my role as chairman could become a lightning rod for BSkyB and I believe that my resignation will help to ensure that there is no false conflation with events at a separate organisation," he said, confirming the news previously reported by BSkyB's news channel.

Mr Murdoch, who was previously chief executive of BSkyB, was dealt a heavy blow in November when more than 40 per cent of the company's independent shareholders failed to back his re-election as chairman.

Since then he has cut his ties with News Corp's British newspaper arm, and moved to the United States to take up his new role running international pay-TV.

The 39-year-old son of Rupert Mudoch, once seen as heir to his father's company, has also continued to plead his innocence ahead of a parliamentary report investigating the phone hacking scandal, which is expected to be heavily critical of him.

News Corp's British newspaper arm, News International, has admitted its News of the World tabloid hacked into the phones of crime victims, war dead and celebrities to generate stories. It has since shut the 168-year-old paper and settled numerous court cases.

Sky News said Mr Murdoch would remain a non-executive director of BSkyB and his place would be taken by Nicholas Ferguson, the senior independent director on the board.

Reuters