News of the World admits phone hacking liability

Fri Apr 8, 2011 6:02pm EDT
 
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By Jodie Ginsberg and Kate Holton

LONDON (Reuters) - Rupert Murdoch's powerful UK news arm reversed course and admitted its role in a long-running phone hacking scandal that had thrown into question the Prime Minister's judgment and threatened Murdoch's biggest ever deal.

News International, parent company of Britain's top-selling News of the World tabloid, had always vigorously denied it knew journalists were hacking the phones of members of the royal family, politicians, celebrities and sports stars, and blamed a handful of "rogue reporters" for the scandal.

But in a major turnaround for the company, part of Murdoch's global media empire News Corp, News International said on Friday it would admit liability and pay compensation in eight cases -- although many more believe they were targeted.

Those who will receive an "unreserved apology" from the group include actress Sienna Miller and politician Tessa Jowell.

The scandal threw into question the judgment of Prime Minister David Cameron, who appointed former News of the World editor Andy Coulson as his head of communications.

Coulson ran the paper at the time of the hacking scandal. Although he has always denied knowledge of it, he was forced to resign as Cameron's media manager earlier this year, saying the focus on the hacking scandal was too great a distraction.

MAJOR DEAL

Analysts said the move was an attempt to draw a line under the case and limit potential financial costs as News Corp tries to push ahead with its planned $14 billion purchase of BSkyB, a deal that has angered other British news operators who fear the group's growing influence over Britain's media.   Continued...