Takeover pull-out

Rupert Murdoch's News Corporation announced on Wednesday that it had withdrawn its bid to take full ownership of the British broadcaster BSkyB.

"It has become clear that it is too difficult to progress in this climate," deputy chairman Chase Carey said in a statement, adding that the company would remain "a committed long-term shareholder."

British Prime Minister David Cameron welcomed the withdrawal which was announced shortly before the British parliament was due to vote on a motion which called on Murdoch to halt the controversial acquisition.

Put forward by Labour opposition leader, Ed Miliband, the motion was met with a rare show of cross-party support.

Murdoch was bidding for the 61 percent of BSkyB which his company does not already own. Critics condemned the bid, however, claiming it would give him too much power over the media in Britain.

Hacking allegations

News Corporation subsidiary News International is currently facing investigation over a phone-hacking scandal.

A spokesman for David Cameron said in a statement that News Corporation should now focus on "clearing up the mess and getting its own house in order,"

Later, Cameron told the UK parliament that an inquiry into phone hacking at Rupert Murdoch's News Corp. would call witnesses under oath, and report its findings within a year. Cameron said he would give evidence himself at the judge-led inquiry, if asked to do so.

He added that "anyone involved in News International phone hacking, however high up, must play no part in UK media."

Public outcry

The closure on Sunday of the newspaper at the center of the scandal - the News of the World - was seen as a tactic by Murdoch to try and salvage the $14-billion (10-billion-euro) bid for BSkyB.

However, public anger is still high over allegations that reporters at the paper hired investigators who hacked into the voice mails of thousands of people, including dead British soldiers and a schoolgirl who was abducted and later found dead.

David Cameron announced last week there would be public inquiries into the allegations, and Murdoch, his son James and Rebekah Brooks, former News of the World editor and current chief executive of News International, have been summoned to appear.

The public inquiries will focus both on the allegations of hacking, and also on allegations that police sold information to journalists.

Serving and former senior officers faced questions from a parliamentary committee on Tuesday, surrounding allegations of bribery.

Former Prime Minister Gordon Brown accused another of Murdoch's papers of hiring "criminals" to obtain private documents and using illegal methods to break the news of his son's illness.

Murdoch's tabloid newspaper The Sun disputed Brown's account, calling it "false" and "a smear."

Spreading to US?

Meanwhile, a US senator has called for an investigation of News Corp. practices in the United States, fearing a similar scandal could have taken place.

"I am concerned that the admitted phone hacking in London may have extended to 9/11 victims or other Americans," Senator John Rockefeller said Tuesday.

Although the scandal has been contained to Murdoch's British businesses, News Corporation is based in New York and owns prominent media outlets including the Wall Street Journal, New York Post and Fox Broadcasting.

News Corporation also holds just under 50 percent of the German pay-tv channel Sky Deutschland.

Author: Charlotte Chelsom-Pill, Catherine Bolsover (AFP, AP, Reuters)

Editor: Michael Lawton