Inquiry into phone hacking by Britain's best-selling newspaper announced

Growing public outrage over alleged hacking of mobile phone belonging to missing girl later found murdered, and reports that the News of the World illegally paid tens of thousands of pounds to senior Scotland Yard officers had been to leak information, sees PM announce inquiry.

LONDON // Prime minister David Cameron bowed to growing public outrage yesterday and agreed to a public inquiry into phone hacking by Britain's best-selling newspaper.

Mr Cameron also told parliament that a separate inquiry would be held into why an initial Scotland Yard investigation into the claims three years ago wrongly concluded that a solitary, rogue reporter on the News of the World and a private investigator had been solely responsible for the hacking.

In fact, it has now emerged that the practice was widespread at the newspaper, owned by Rupert Murdoch's News International, with journalists paying for access to the mobile phone voicemails of at least 100 people, mainly celebrities, and, possibly, many more.

Police also confirmed yesterday that they had been handed e-mails by the News of the World showing that senior Scotland Yard officers had been illegally paid tens of thousands of pounds in recent years to leak information.

The e-mails were said to implicate the then-editor, Andy Coulson, who went on to become Mr Cameron's director of communications before resigning over the hacking scandal in January.

The controversy has been rumbling on for more than four years, after Clive Goodman, the newspaper's royal correspondent, and private detective Glenn Mulcaire were jailed for hacking into the voicemails of staff members of the royal family. But on Tuesday, new revelations sparked a public outcry.

It was then that The Guardian newspaper revealed that not only had the phones of the rich and famous been hacked, but also that of Milly Dowler, a 13-year-old who disappeared on her way home from school on the outskirts of London in 2002 and whose body was not found for six months.

It was reported yesterday that the tabloid had also targeted the phones of the families of Holly Wells and Jessica Chapman - two 10-year-olds who were abducted in Cambridgeshire in 2002 and whose bodies were found two weeks later. Relatives of some of the 52 people killed by suicide bombers in the 7/7 attacks on the London transport system in 2005 had also been subject to hacking.

Mr Cameron told MPs yesterday that the latest revelations were "absolutely disgusting" and that the inquiries would start as soon as the latest police probe into the hacking scandal was completed.

"We are no longer talking here about politicians and celebrities. We are talking about murder victims, potentially terrorist victims, having their phones hacked into," the prime minister said.

"It is absolutely disgusting, what has taken place, and I think everyone in this House and, indeed, this country will be revolted by what they have heard and what they have seen on their television screens."

Ed Miliband, leader of the opposition Labour Party, also demanded that Mr Cameron refer the proposed takeover of the UK's biggest satellite TV provider, BSkyB, by Mr Murdoch to the Competition Commission to test if he were a "fit and proper" person to run the broadcaster.

Mr Cameron would make no such undertaking despite loudening voices expressing concern that the hacking scandal cast doubts on Mr Murdoch's News Corp's bid to buy the 61 per cent of BSkyB that it does not already own.

The prime minister also said that an independent inquiry into the scandal should look not just at practices at the News of the World but also "a wider look into media practices and ethics in this country".

Even The Times, a newspaper in the same News International stable as the News of the World, accepted in a leader article yesterday that the latest phone hacking revelations had "besmirched the name of journalism".

After months during which the paper appeared relatively mute over the scandal, it carried a front-page story yesterday and devoted two inside pages to it.

"Anyone who believes in the nobility of the trade of reporting the truth … and anyone who believes in the contribution of vibrant comment to a raucous and well-informed democracy, has to be clear when a line has been crossed," it commented.

But the cracks now appearing in the relative unity that News International has maintained so far could be nothing compared to the commercial damage the company's various titles might suffer.

Three of the News of the World's biggest advertisers - Ford, Virgin Holidays and the Halifax bank - have all now cancelled contracts until the completion of the latest police inquiry.

Should the government eventually relent and either block or stall the News Corp takeover of BSkyB, the financial implications for Mr Murdoch's media empire in the UK could be dire.