LONDON (Reuters) – Prime Minister David Cameron led a chorus of condemnation Tuesday over allegations a top-selling British newspaper from Rupert Murdoch's global media empire hacked the voicemail of a missing schoolgirl who was later found murdered.
Suggestions that in 2002 a News of the World investigator listened in to, and deleted, messages left for the cellphone of the 13-year-old, misleading police and her family, caused uproar in parliament, where the tactics and power of the tabloid press, many of them Murdoch titles, have long caused controversy.
The gravest accusations yet drove the long-rumbling scandal into the heart of Murdoch's News Corp: it came as it seeks official approval to take over broadcaster BSkyB; and forced Rebekah Brooks, a Murdoch confidante who was the News of the World editor at the time, to plead ignorance and say she would not resign as head of News Corp's British newspaper arm.
Pressure is unlikely to let up, however. At least one major advertiser, carmaker Ford, said it was pulling ads from the News of the World -- though not the other Murdoch papers -- until it saw how the tabloid dealt with the new allegation.
Lender Halifax said on its official Twitter feed that it was considering its options, while telephone operator T-Mobile UK said on Twitter it was reviewing its advertising position.
And police looking into phone hacking by the newspaper later said they had been in touch with the parents involved in another notorious child murder, when two 10-year-old girls were seized and killed by a school caretaker in the town of Soham in 2002.
Suggestions that the News of the World's activities might have hampered police and given false hope to the family of the murdered teen-ager, Milly Dowler, caused uproar in Britain and moved Cameron to comment while on a visit to Afghanistan.
"On the question about the really appalling allegations about the telephone of Milly Dowler, if they are true, this is a truly dreadful act," Cameron told journalists in Kabul.
Lawmakers agreed to clear three hours of parliamentary time for an emergency debate on the issue Wednesday.
Cameron had until now said little about the phone hacking scandal, which forced the resignation earlier this year of his own spokesman, another former editor of the News of the World.
His government is weighing approval of News Corp's takeover bid for BSkyB though it was unclear the latest twist of scandal would do much to raise what analysts see as a slim chance that his center-right administration would step in to block the move. Critics say the deal concentrates too much political power in the hands of the Australian-born American media baron.
PREMIER'S SPOKESMAN
The phone-hacking affair, in which journalists desperate to boost circulation dialed in to mobile phone voicemail servers of public figures in the hunt for stories, has rumbled for years -- the News of the World's royal correspondent and a private investigator were jailed in 2007 after hacking.
In January, angry celebrities, including entertainment and sports stars, as well as politicians, who feared their messages had been listened to prompted police to open a new inquiry.
Cameron, who is close to the Murdoch family and has often been spotted socializing with Brooks in Oxfordshire where they both have country homes, also reiterated that the BSkyB merger should be handled separately from the phone-hacking probe.
Murdoch transformed the British press landscape in the 1980s during Margaret Thatcher's years as prime minister, bringing in new technology and confronting printers' and journalists' trade unions. He commands audiences with global leaders and, through his media, is seen as one of the world's most powerful men.
Analysts expect the $15 billion-plus BSkyB deal to go through.
"The secretary of state is not entitled to consider these latest appalling allegations when considering the News Corp proposal to buy the rest of BSkyB," said analyst Chris Goodall of media and telecoms research firm Enders Analysis.
The ministry reviewing the bid declined comment. But opposition Labour politician and former deputy prime minister John Prescott, who was told by police his phone may have been hacked, wrote to communications regulator Ofcom to ask it to review the bid and said it was not too late to halt the deal.
Ofcom has the power to decide whether News Corp is a fit and proper owner of BSkyB but an industry source said it would not do anything until the police investigation into the phone hacking scandal at the News of the World was concluded.
BSkyB shares closed 0.6 percent down at 845 pence, underperforming a stronger European media index.
FALSE HOPE
The kidnap and murder of Milly Dowler is among the highest-profile criminal cases of recent years. Revelations from her family's lawyer that police were checking whether journalists manipulated her cellphone account while she was missing come less than two weeks after her killer was finally convicted.
Influential BBC journalist Robert Peston blogged on his Twitter feed: "News Int execs tell me they fear there may have been worse examples of NOTW hacking than that of Milly Dowler's phone. The mind reels." News International declined to comment.
Simon Greenberg of News International told Sky News Tuesday evening that it had found "some significant new information that certainly helps us get closer to establishing the facts of the case about who was involved," without giving further details. He also said it had been in dialogue with its commercial partners, informing them of the steps taken.
Opposition Labour party leader Ed Miliband said News International Chief Executive Brooks, News Corp's most senior executive so far affected, should think about resigning.
"She should consider her position. But this goes well beyond one individual. This is about the culture and practices that were obviously going on at the News of the World, for a sustained period," he said in a statement.
Brooks told staff in a memo she would not go. "It is almost too horrific to believe that a professional journalist or even a freelance inquiry agent working on behalf of a member of the News of the World staff could behave in this way."
Glenn Mulcaire, the private investigator jailed for phone hacking, issued a statement released to the Guardian, the newspaper that has forced much of the agenda, in which he apologized "to anybody who was hurt or upset by what I have done," blaming the constant demand for results.
"I knew what we did pushed the limits ethically. But, at the time, I didn't understand that I had broken the law at all," he was cited as saying.
Media consultant Steve Hewlett told BBC radio it "looks like an industrial-level activity, which makes editors' denial that they knew anything about it even more implausible."
Facebook and Twitter campaigns sprang up in the wake of the latest allegation encouraging to boycott the News of the World.
It is not clear how badly it might be hit commercially but a boycott in 1989 of best-selling sister paper The Sun by Liverpool readers is estimated to have cost tens of millions of pounds.
People in the English city stopped buying the paper after it wrongly accused Liverpool soccer fans of loutish behavior while 96 of their fellow fans were crushed to death ahead of cup tie at Hillsborough stadium.
News Corp long maintained that the cases of phone hacking were isolated and the work of a lone journalist gone off the rails. This year, it admitted liability in a few cases and will pay compensation to victims including actor Sienna Miller. Others, including actor Jude Law and soccer star Ryan Giggs are still suing the paper.
Peta Buscombe, chair of Britain's Press Complaints Commission, said News Corp had lied, leading the PCC to conclude in 2009 that there was no evidence the phone hacking was the work of more than one rogue reporter. "I personally and the PCC are so angry because clearly we were misled," she told the BBC.
Police, who have been accused of being sluggish in probing a media organization to which some officers sold information, have arrested three journalists since relaunching their inquiries.
(Additional reporting by Mohammed Abbas in Kabul and Jodie Ginsberg, Olesya Dmitricova, Keith Weir, Michelle Nichols, Avril Ormsby, Stefano Ambrogi and Matt Falloon in London; Editing by Alastair Macdonald)
