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Amid Phone Hacking Scandal, Murdoch Withdraws Bid for BSkyB


News Corporation CEO Rupert Murdoch holds a copy of The Sun and The Times as he is driven away from his flat in central London July 11, 2011.

News Corporation CEO Rupert Murdoch holds a copy of The Sun and The Times as he is driven away from his flat in central London July 11, 2011.

Media baron Rupert Murdoch has withdrawn his bid for control of British Sky Broadcasting amid Britain's phone-hacking scandal and allegations against his journalists.

Parliament was poised Wednesday to vote overwhelmingly for a non-binding resolution calling on Murdoch to end his $12 billion bid for control of the satellite television company. But before the vote, a Murdoch deputy, News Corporation president Chase Carey, said it had "become clear" it would be "too difficult" for the company to try to win approval for the acquisition "in this climate."

The company's retreat is a blow to Murdoch's efforts to consolidate and expand his British media operations.

News of the World

It came as British officials and much of its population have recoiled at allegations that journalists at the News of the World tabloid that Murdoch closed last weekend, and at his other publications, hacked into phones of ordinary citizens and paid police for information for stories they were working on. News of the World reporters allegedly hacked into the phones of murdered schoolgirl Milly Dowler and relatives of British soldiers who had been killed in combat.

British Prime Minister David Cameron told Parliament he will look into whether victims of the 2001 terrorism attacks in the United States were targeted in the phone-hacking.

Were 9/11 victims hacked?

Cameron said a new police investigation should be able to resolve whether journalists at the Murdoch publications sought to access information about the 9/11 victims. A non-Murdoch newspaper, The Daily Mirror, claimed that some journalists had approached a private investigator in the United States to try to access the phone data of some of the victims of 9/11.

Cameron told lawmakers that the phone-hacking and police bribery scandal is a "firestorm" that is consuming parts of the media and police, and "indeed our political system's ability to respond." But he said the focus now must be on the victims and to "make sure the guilty are prosecuted."

Cameron, like other British politicians, has often sought Murdoch's approval and support from his British publications, including the News of the World. But with the burgeoning scandal, he has sought to distance himself from Murdoch, telling lawmakers that a wide-ranging investigation must be "as robust as possible."

He said the media's relationship with police must be investigated, and questioned why earlier warnings about press misconduct "were not heeded."

Cameron later met with Dowler's family at 10 Downing Street, the prime minister's residence.

Murdoch fights back

Even as the 80-year-old Murdoch withdrew the BSkyB bid, one of his publications, The Sun tabloid, struck back at one allegation against its reporting. Former Prime Minister Gordon Brown had claimed earlier in the week that the newspaper's reporters had accessed confidential medical records that showed his infant son had contracted cystic fibrosis, leaving him and his wife Sarah in tears as they learned that a story was being published about their son Fraser.

But the newspaper posted a headline "Brown Wrong" on its latest edition, saying that it first learned about the boy's diagnosis from the father of another child who has cystic fibrosis.

The Sun said it was "not aware" that Brown or any of his associates complained about the story.

Concerns about News Corp

In the United States, Senator John Rockefeller has called for an investigation into the allegations to determine whether News Corporation has broken any American laws.

Senator Rockefeller said he is concerned that Murdoch's News Corporation, which owns The Wall Street Journal, Fox Broadcasting and other U.S. media companies, might have targeted the 9/11 victims and their families. He warned the consequences could be "severe."

British lawmakers have summoned Murdoch, his son, James, and other company executives to answers questions next week about the various allegations.

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