News Corporation has been warned that its ability to borrow money may be influenced by the ongoing phone hacking scandal.

Beleaguered premier Silvio Berlusconi has come under pressure on two fronts: his crucial coalition ally demanded tax cuts or early elections, and Italy's credit rating appeared in danger due to high public debt and a laggard economy.

Standard and Poor's has further downgraded Ireland's credit rating from A to double-A.

The Government will publish its €15bn plan for drastic savings today as it battles economic ruin against a backdrop of political turmoil and a further downgrading of the country's credit rating.

The European Commission has today called for tighter control of credit ratings agencies.

Ireland's economy will recover more quickly than several other European countries, and concerns about fiscal and political risks to the country are exaggerated, according to leading global ratings agency Standard and Poor's.

Ireland is now being viewed as the second most risky country in the eurozone after Greece.