James Murdoch Contradicted By Ex-Legal Manager

James Murdoch was under pressure Friday over claims he misled lawmakers about Britain's phone hacking scandal, as a lawmaker called for a police investigation and Prime Minister David Cameron insisted the media scion had "questions to answer" about what he knew and when he knew it.

The presumed heir to Rupert Murdoch's media empire testified before a parliamentary committee that he was not aware of evidence that eavesdropping at the News of the world went beyond a jailed rogue reporter. But in a sign that executives are starting to turn against the company, two former top staffers said late Thursday they told him years ago about an email that suggested wrongdoing at the paper was more widespread than the company let on.

The claim brings more trouble for the embattled James Murdoch, who heads the Europe and Asia operations of his father's News Corp., as his family fights a scandal that has already cost it one of its British tabloids, two top executives and a $12 billion-dollar bid for control of lucrative satellite broadcaster British Sky Broadcasting.

Tom Watson, a legislator from the opposition Labour Party, called for Scotland Yard to look into the allegation and said it "marks a major step forward in getting to the facts of this case."

"If their version of events is accurate, it doesn't just mean that Parliament has been misled, it means police have another investigation on their hands," Watson told the BBC.

James Murdoch, who was not testifying under oath at Tuesday's parliamentary hearing, could face sanction if it becomes clear he deliberately misled lawmakers - but the prospect is highly unlikely. The last time the House of Commons fined anyone was in 1666.

The House of Commons no longer has the power to imprison a nonmember, but it could refer a case to the Metropolitan Police.

Still, News International, News Corp.'s British newspaper arm, said James Murdoch stood by his statement about the scandal, which exploded after revelations journalists at the News of the World tabloid hacked the phone of a 13-year-old murder victim while police were still searching for her and broadened to include claims reporters paid police for information.

That set off a firestorm which hit at the highest reaches of British society. It forced Rupert Murdoch to shutter News of the World, prompting a spate of high-profile resignations and departures at News Corp. and delivering the 80-year-old media baron and his son to be grilled before lawmakers.

The scandal continued to spread Friday, as Scottish police said they were opening their own perjury and corruption investigations related to the phone hacking - one that has the potential to further taint ex-News of the World editor Andy Coulson, who served as Cameron's top media aide.

They say they will focus on whether any witnesses lied at the trial of a Scottish politician who was jailed earlier this year for perjuring himself during a lawsuit against the now-defunct News of the World. Coulson was one of the trial's most prominent witnesses.

Cameron continued to distance himself from a once-cozy relationship with the Murdochs.
"Clearly James Murdoch has got questions to answer in Parliament and I am sure that he will do that," Cameron said Friday, adding the Murdochs had "a mess to clear up."

James Murdoch, in his testimony, batted away claims he knew the full extent of the illegal espionage at the News of the World when he approved a 700,000 pound ($1.1 million) payout in 2008 to soccer players' association chief Gordon Taylor, one of the phone hacking victims.

News International had long maintained that the eavesdropping was limited to a single rogue reporter, Clive Goodman, and the private investigator he was working with to break into voice mails of members of the royal household.

But an email uncovered during legal proceedings seemed to cast doubt on that claim. It contained a transcript of an illegally obtained conversation, drawn up by a junior reporter and marked "for Neville" - an apparent reference to the News of the World's chief reporter, Neville Thurlbeck.

Because it seemed to implicate others in the hacking, the email had the potential to blow a hole through News International's fiercely held contention that one reporter alone had engaged in hacking. If James Murdoch knew about the email - and was aware of its implication - it would lend weight to the suggestion he'd approved the payoff in an effort to bury the scandal.

James Murdoch told lawmakers he was not aware of the email at the time, but former legal adviser Tom Crone and ex-editor Colin Myler contradicted him.

"We would like to point out that James Murdoch's recollection of what he was told when agreeing to settle the Gordon Taylor litigation was mistaken," they said. "In fact, we did inform him of the 'for Neville' email which had been produced to us by Gordon Taylor's lawyers."

The Conservative lawmaker who heads the committee, James Whittingdale, said James Murdoch would be asked in writing to clarify his testimony, but would not be recalled before the committee.

Murdoch's News Corp. is trying to keep the damage from spreading to its more lucrative U.S. holdings, including the Fox network, 20th Century Fox and the Wall Street Journal.

British politicians have felt the heat too, with the country's top two party leaders falling over each other to distance themselves from papers they once courted assiduously.

Cameron's former communications director - Murdoch newspapers veteran Andy Coulson - came under fresh scrutiny Thursday after it was reported that he did not have a top-level security clearance, which spared him from the most stringent type of vetting.

The former News of the World editor was arrested this month in connection with allegations that reporters at the tabloid intercepted voice mails. Victims included celebrities, crime victims and politicians.

Lawyers could also have been targeted, according to The Law Society. It said solicitors had been warned by police that their phones may have been hacked by the paper.

Scotland Yard, accused of failing to properly investigate the scandal for years, has also been asked to investigate another explosive claim: That journalists bribed officers to locate people by tracking their cell phone signals.

The practice is known as "pinging" because of the way cell phone signals bounce off relay towers as they try to find reception. Jenny Jones, a member of the board that oversees the Metropolitan Police Authority, called for the inquiry into the alleged payoffs by journalists at the News of the World.