Murdoch Halts Bid to Purchase BSkyB as Phone Hacking Fallout Continues

BUSINESS -- July 13, 2011 at 10:57 AM EDT

Murdoch Halts Bid to Purchase BSkyB as Phone Hacking Fallout Continues

Photo by Chris Ratcliffe/Bloomberg via Getty Images.

Rupert Murdoch's News Corp. has dropped its bid to purchase British satellite broadcaster BSkyB in light of the still-unfolding scandal over the use of phone hacking by journalists from News of the World, accused of targeting politicians, families of victims of the 7/7 attacks in London, and a teenage murder victim.

News Corp. has been pursuing a $12 billion buy that would give it full control of BSkyB, or British Sky Broadcasting, in which it already has a 39 percent stake. A News Corp. spokesman said that despite the nature of recent events, "News Corporation remains a committed long-term shareholder in BSkyB."

British Prime Minister David Cameron, who himself has been criticized for being supported by some newspapers in Murdoch's British brand, and for hiring former News of the World editor Andy Coulson as his spokesman, told Parliament that an full inquiry in to the News of the World phone hacking scandal would be led by a senior-level judge and call on high-level media figures and politicians to give needed evidence.

Prime Minister Cameron said he hoped the inquiry would lead to standards for the British media that "supports their freedom, plurality and independence from government but which also demands the highest ethical and professional standards."

"If I was lied to, if the police were lied to, if the select committee were lied to, it would be a matter of deep regret and a matter for a criminal prosecution," Cameron said.

Watch: How Will News of the World Scandal Affect Murdoch's Power, Media Empire?

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