London - In a breathtaking response to a scandal engulfing his media empire, Rupert Murdoch moved on Thursday to close down the News of the World, Britain's biggest selling Sunday newspaper.
As allegations mounted this week that its journalists had hacked the voicemails of thousands of people, from child murder victims to the families of Britain's war dead, the tabloid had haemorrhaged advertising and alienated millions of readers.
Yet no one, least of all the 168-year-old paper's staff, was prepared for the drama of a single sentence that will surely go down as one of the most startling turns in the 80-year-old Australian-born press baron's long and controversial career.
"News International today announces that this Sunday, July 10 2011, will be the last issue of the News of the World," read the preamble to a statement from Murdoch's son James, who heads the British newspaper arm of News Corp.
Gobsmacked
Hailing a fine muck-raking tradition at the paper, which his father bought in 1969, James Murdoch told its staff that the latest explosion of a long-running scandal over phone hacking by journalists had made the future of the title untenable:
"The good things the News of the World does... have been sullied by behaviour that was wrong. Indeed, if recent allegations are true, it was inhuman and has no place in our company.
"The News of the World is in the business of holding others to account. But it failed when it came to itself.
"This Sunday will be the last issue of the News of the World ... In addition, I have decided that all of the News of the World's revenue this weekend will go to good causes.
"We will run no commercial advertisements this weekend."
Steven Barnett, professor of communications at Westminster University, said he was "gobsmacked":
"Talk about a nuclear option," he told Reuters.
"It will certainly take some of the heat off immediate allegations about journalistic behaviour and phone hacking."
Tom Watson, a member of parliament from the Labour Party who had campaigned for a reckoning from the paper over the phone hacking scandal, said: "This is a victory for decent people up and down the land.
"I say good riddance to the News of the World."
Government ties
There was no immediate response from members of Prime Minister David Cameron's government, which has found itself embarrassed by the avalanche of allegations this week after it gave its blessing in principle to News Corp's takeover bid for broadcaster BSkyB.
It was unclear whether the company would produce a replacement title for the lucrative Sunday market, in which, despite difficult times for newspaper circulations, the News of the World is still selling 2.6 million copies a week.
One option, analysts said, might be for its daily sister paper the Sun to extend its coverage to a seventh day.
News of the World journalists were stunned. Anger may be directed at top News International executive and Murdoch confidante Rebekah Brooks, who edited the paper a decade ago during the period of some of the gravest new allegations.
"We didn't expect it at all. We had no indication. The last week has been tough... none of us have done anything wrong. We thought we were going to weather the storm," said one News of the World employee who asked not to be named.
The scandal had deepened with claims News of the World hacked the phones of relatives of soldiers killed in action in Iraq and Afghanistan.
The military veterans' association broke off a joint lobbying campaign with the paper and said it might join major brands in pulling its advertising.
The British Legion said it could not campaign with the News of the World on behalf of the families of soldiers "while it stands accused of preying on these same families in the lowest depths of their misery".
Signalling how far the racy, flag-waving title has alienated a core readership already horrified by suggestions its reporters accessed the voicemails not only of celebrities and politicians, but also of missing children and crime victims, an online boycott petition had garnered hundreds of thousands of signatures.
Television takeover
The government had already backed a deal for News Corp to buy out the 61% of BSkyB it does not already own, and says the two cases are not linked. But US shares in News Corp fell more than 5% on Wednesday, though they recovered somewhat in a stronger general market on Thursday.
Formal approval for the deal had been expected within weeks after the government gave its blessing in principle. But it now seems unlikely for months, although officials denied suggestions that they were delaying a decision because of the scandal.
"The secretary of state has always been clear that he will take as long as is needed to reach a decision. There is no 'delay' since there has been no set timetable for a further announcement," a government spokesperson said. Some media reported that a decision was now expected in September.
Critics, notably on the left of British politics, say giving Murdoch full control of Sky television would concentrate too much media power in his hands and risk skewing political debate.
Cameron has proposed inquiries into the newspaper and into the wider issue of ethics in the cut-throat, and shrinking, news business. Arguments over privacy, free speech and the power of the press have already stirred heated debate this year.
However, critics called Cameron's move to set up official inquiries a tactic to push the embarrassing affair far into the future. The precise form of those inquiries is still unclear.
Labour leader Ed Miliband has called for the BSkyB deal to be referred to the Competition Commission and said that Brooks, Murdoch's most senior British newspaper executive, should quit: "The prime minister has a very close relationship with a number of the people involved in this," said Miliband.
"He should ignore those relationships and come out and say the right thing because that is what the country expects."
Personal ties
So far, Murdoch has said he will stand by Brooks, 43, who edited the paper from 2000 to 2003, when some of the gravest cases of phone hacking are alleged to have taken place.
She is a also a regular guest of the prime minister, and enjoys good relations with previous Labour leaders in power until last year.
Senior politicians from all parties, including Cameron and Miliband, rubbed shoulders with Murdoch, Brooks and other News Corp executives at Murdoch's exclusive annual summer party last month, underlining the power his organisation wields.
Both Miliband and Cameron chose former News International employees as media advisers, although Cameron's choice of Andy Coulson, who succeeded Brooks as News of the World editor, has caused the prime minister the more obvious problems.
Coulson quit the paper over the first hacking case in 2007 and went to work as Cameron's spokesperson. He resigned from the prime minister's office in January as police reopened inquiries.
The main accusations are that journalists, or their hired investigators, took advantage of often limited security on mobile phone voicemail boxes to listen in to messages left for celebrities, politicians or people involved in major stories.
Disclosure that the practice involved victims of crime came when police said a private detective working for the News of the World in 2002 hacked into messages left on the phone of murdered schoolgirl Milly Dowler while police were still looking for her.
Weather the storm
Police have also been criticised over allegations officers took money from the News of the World for information.
London's Evening Standard newspaper said on Thursday that police officers took more than £100 000 in payments from senior journalists and executives at the paper.
Analysts believe the global Murdoch empire, which includes Fox television and the Wall Street Journal, can weather a storm of reproach from advertisers, readers and politicians in Britain - though there were signs of international ramifications.
In Murdoch's native Australia, the leader of the Greens party said he wants the government to examine the ramifications on Australia of the phone hacking scandal.
The secretary general of the Council of Europe, Thorbjorn Jagland, said it was concerned by allegations of breaches of privacy. He said: "Governments need to act resolutely to fight and to prevent violations of this fundamental right, whilst actively protecting and promoting freedom of speech."
