Pressure mounts over BSkyB bid

The British Government will face mounting pressure to freeze Rupert Murdoch’s planned takeover of BSkyB today as the phone hacking scandal threatens to cause a major political storm.

Whitehall lawyers were reported to be scrambling to devise a safe way to put the brakes on in order to avoid the embarrassment of the Liberal Democrats siding with Labour in a Commons vote.

Mr Murdoch held talks with some of his most trusted lieutenants last night after flying in to the UK on the day the News of the World was shut down to take personal charge of the crisis.

Among those who met over dinner was News International chief executive Rebekah Brooks – editor of the News of the World at the time the mobile phone of murdered teenager Milly Dowler was hacked.

It was reported that Ms Brooks – who has faced sustained calls to quit but denies any knowledge of hacking under her watch – will be questioned by Scotland Yard detectives investigating hacking and corruption claims this week.

Questions also centred today on who at News International was aware of an internal report from 2007, passed recently by the firm to the police, which is reported to show the existence of payments to police officers for information and that hacking was more widespread than thought.

Mr Murdoch was urged by Labour leader Ed Miliband to put his expansion plans on ice for the duration of the criminal probe and also repeated his calls for Ms Brooks to be removed.

But the media mogul indicated that she remained his priority. And if he also refuses to budge on the takeover, Prime Minister David Cameron faces an awkward dilemma in deciding how to deal with the issue.

Senior Liberal Democrats made clear yesterday that they were prepared to back Labour in a vote on Wednesday if it tabled a non-partisan motion calling for a delay.

With many Tories also extremely uncomfortable with the public fallout from allowing the move to go ahead in the present circumstances, there is a serious prospect of defeat.

While experts were divided yesterday on the legal force of any vote, none were in any doubt that it would be almost impossible for the Government to ignore it.

Cabinet Minister Philip Hammond accused Mr Miliband of “playing politics” with the issue yesterday – insisting the Government shared the public concerns but was legally bound to handle the competition issue correctly.

He pointed instead to the possibility that media regulator Ofcom could step in by investigating whether the allegations meant News Corp was no longer “fit and proper” to run BSkyB.

Mr Miliband said: “When the public have seen the disgusting revelations that we have seen this week, the idea that this organisation, which engaged in these terrible practices, should be allowed to take over BSkyB ... without the criminal investigation having been completed and on the basis of assurances from that self-same organisation – frankly, that just won’t wash with the public.”

Further political pressure will be applied by campaigners and phone hacking victims including Milly Dowler’s family when they meet Deputy Prime Minister Nick Clegg in the first of a series of talks with senior politicians this morning.

Organised by the Media Standards Trust, which led a major campaign for a public inquiry, they will demand “stronger, clearer and faster action”.

Milly’s parents are suing the News of the World over claims that their daughter’s phone was targeted by the newspaper when she went missing in 2002.

The Prime Minister announced on Friday that there would be two public inquiries, one led by a judge looking into phone hacking by newspapers and possible corruption involving police officers taking cash for information – and another into the wider question of press regulation.

Former News of the World editor Andy Coulson, ex-royal editor Clive Goodman and an unnamed 63-year-old man were all arrested and questioned by detectives over recent days before being released on police bail until October.

Mr Cameron faced renewed claims at the weekend that he appointed Mr Coulson as his Number 10 communications director despite warnings, this time from ex-Liberal Democrat leader Paddy Ashdown, that it would prove a “disaster” when such allegations emerged.