US prosecutors may go after News Corp

As reports suggested that the US authorities could take legal action against his News Corp company, which is registered in America, Rupert Murdoch will arrive to see the last edition of the News of the World hit the streets.

News of the World employees react outside the offices of News International in London.

LONDON // Rupert Murdoch was expected to arrive in London today to take personal charge of the phone-hacking scandal that has engulfed his media empire.

As reports suggested that the US authorities could take legal action against his News Corp company, which is registered in America, Mr Murdoch will arrive to see the last edition of the News of the World hit the streets.

But the problems confronting Mr Murdoch go far wider than the loss of the best-selling tabloid. At immediate risk is News Corp's bid to win government approval for the complete takeover of UK-based broadcaster company BSkyB. In the longer term, the company's expansion plans in Europe and Asia are considered to have been jeopardised by the scandal.

Additionally, The Guardian newspaper reported yesterday that Mr Murdoch's empire could face serious legal challenges in the US because of the claims that News of the World journalists had been hacking up to 4,000 people's phones and paying police tens of thousands of pounds in bribes.

The newspaper also suggested that Mr Murdoch's son James, deputy CEO of News Corp and the man in charge of the company's British operations, could face prosecution under America's Foreign Corrupt Practices Act (FCPA).

"I would be very surprised if the US authorities don't become involved in this conduct," Mike Koehler, a specialist in the FCPA at Butler University law school in Indianapolis, told The Guardian.

"If money is being paid to officials, in this case the police, in order to get information to write sensational stories to sell newspapers, that would qualify [for an FCPA prosecution]."

In Britain, it emerged yesterday that a 63-year-old man, believed to be a former News of the World employee, had become the third person to be arrested in 24 hours by detectives investigating the scandal.

On Friday, Andy Coulson, a former editor who went on to become the prime minister David Cameron's communications director, had been arrested along with Clive Goodman, the newspaper's former royal editor who, in 2007, was jailed for getting a private detective to hack the voicemails of Buckingham Palace staff.

News International, the Murdoch parent company in the UK, yesterday strenuously denied reports that executives had attempted to delete millions of e-mails sent and received by staff at the newspaper.

Rebekah Brooks, a former News of the World editor and now News International chief executive, has reportedly told staff that the newspaper had to close because there was "worse to come" in the way of damaging revelations.

Meanwhile, the prime minister came under renewed pressure to appoint a judge immediately to begin the promised investigation into the scandal.

Deputy Labour leader Harriet Harman told Sky News that time was "running out" and that Mr Cameron should act immediately. "Think about what is going to happen at the end of today: the News of the World is going to be closed down, all the staff are going to be disappearing," she said.

A spokesman for the prime minister said the government was acting "as rapidly as possible and legally permissible and that the Lord Chief Justice [Lord Igor Judge] had been asked to propose a candidate to lead the inquiry".