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Prime Minister David Cameron's former communications chief and an ex-royal reporter for the News of the World tabloid were arrested Friday, in a phone hacking and police corruption scandal that has already toppled a newspaper and rattled the relationship between top politicians and the powerful Murdoch media empire.
The 168-year-old muckraking tabloid was shut down Thursday, after the paper was engulfed by allegations that its journalists paid police for information and hacked into the phone messages of celebrities, young murder victims and even the grieving families of dead soldiers.
The revelations horrified both ordinary Britons and advertisers, who pulled their ads en masse.
The government signaled that Murdoch's coveted takeover of satellite broadcaster British Sky Broadcasting could be delayed as a result of the crisis.
"Given the events of recent days, this will take some time," Cameron said.
London police said a 43-year-old man was arrested Friday morning on suspicion of corruption and "conspiring to intercept communications."
London police said a 43-year-old man was arrested Friday morning on suspicion of corruption and "conspiring to intercept communications." They did not name him, but offered the information when asked about Andy Coulson, Cameron's once-powerful aide and a former editor of News of the World.
The Press Association news agency reported that Clive Goodman, the former News of the World royal reporter who served a jail term in 2007 for hacking into the phones of royal aides, was re-arrested Friday on suspicion of making illegal payoffs to police for information.
London police confirmed that a 53-year-old man had been arrested on suspicion of corruption. Detectives were searching his house south of London, as well as Coulson's London home.
Cameron quickly distanced himself from a crisis knocking at the door of 10 Downing St., acknowledging that British politicians and the press had become too cozy and promising investigations into both the activities at the tabloid and into future media regulation.
"The truth is, we've all been in this together," Cameron told reporters at a hastily arranged news conference Friday morning. "Party leaders were so keen to win the support of newspapers that we turned a blind eye to the need to sort this issue. The people in power knew things weren't right but they didn't do enough quickly enough."
Coulson quit as editor of News of the World after Goodman and a private investigator were jailed in 2007 for hacking into the phones of royal aides. He maintained he knew nothing of the hacking, and was hired in 2010 as Cameron's director of communications. Coulson resigned from his Downing Street job in January as it became clear that hacking had been far more widespread at the paper.
Opposition Labour Party leader Ed Miliband urged Cameron to apologize for "the appalling error of judgment he made in hiring Andy Coulson." Cameron refused and said Coulson remained a friend. But the prime minister distanced himself from his former ally.
"[Coulson] gave me assurances," Cameron said. "He said he had resigned because of what had happened, but he didn't know the hacking had taken place."
"I took a conscious choice to give someone who had screwed up a second chance," Cameron said. "He worked for me, he worked for me well, but actually he decided in the end the second chance wouldn't work, he had to resign all over again for the first offense."
The phone hacking scandal has not only sunk a venerable newspaper, but exposed an uncomfortably close relationship among British politicians, press and police.
Cameron said press self-regulation had failed and a new body, independent of the media and the government, was needed to properly enforce standards
The newspaper is closing down amid an expanding police investigation of phone hacking into missing girls and grieving families as well as celebrities, and the alleged press bribery of police officers for information. It comes just as media baron Rupert Murdoch is seeking U.K. government clearance for a euro12 billion ($19 billion) bid for full control of British Sky Broadcasting, a prize far more valuable than his British stable of newspapers.
The British government gave its qualified approval in June to Murdoch's News Corp. purchasing the 61 percent of British Sky Broadcasting that it doesn't already own, on the condition it spins off news channel Sky News as a separate company.
Despite the public outcry, many analysts think Britain will still sanction the takeover, but the government signaled Friday that a decision is likely to be delayed.
Culture Secretary Jeremy Hunt said Friday the huge volume of responses to a public consultation on the takeover, said to exceed 100,000 submissions, would delay the approval process. Analysts expect the BSkyB deal approval to be delayed now until at least September.
Cameron said his friend Rebekah Brooks, a former editor of the tabloid, should have resigned as chief executive of News International, the British unit of Rupert Murdoch's News Corp.
The prime minister referred to reports that Brooks had offered her resignation. "In this situation I would have taken it," Cameron said.
He also said there were questions to be answered by James Murdoch, the heir-apparent to his father's media empire.
"I want everyone to be clear: Everything that has happened is going to be investigated," Cameron said.
He said a judge will be appointed to lead a thorough investigation of what went wrong at the News of the World, including alleged bribery of police officers, and a second inquiry to find a new way of regulating the press.
Royal editor Goodman and a private investigator working for the tabloid were sent to prison in 2007 after being convicted of hacking into royal telephones, but the police investigation of the activity at the time has been criticized as incomplete and compromised by new bribery allegations.
The scandal exploded this week after it was reported that News of the World had hacked the mobile phone of 13-year-old murder victim Milly Dowler in 2002 while her family and police were desperately searching for her. News of the World operatives reportedly deleted some messages from the phone's voicemail, giving the girl's parents false hope that she was still alive.
That ignited public outrage far beyond any previous reaction to press intrusion into the lives of celebrities, which the paper has acknowledged and for which it paid compensation.
Dozens of companies pulled their advertising from the paper this week, fearing they would be tainted by association. James Murdoch then announced Thursday that this Sunday's edition of the tabloid would be its last and all revenue from the final issue, which will carry no ads, would go to "good causes."
News International , News Corp.'s British unit, has not said whether it will move quickly to put another paper into the Sunday market that had been dominated for decades by News of the World. According to online records, an unnamed U.K. individual on Tuesday bought up the rights to the domain name "sunonsunday.co.uk."
Shares in BSkyB, which have fallen all week because of doubts whether the takeover will go ahead, were down more than 4 percent Friday in London trading at 779 pence ($12.40).
Shares in News Corp. rose 1.6 percent on the Nasdaq index in New York after Thursday's announcement.
This program aired on July 8, 2011. The audio for this program is not available.
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