Murdoch's News Corp. withdraws bid for BSkyB

Rupert Murdoch's News Corp. has withdrawn its bid for British satellite broadcaster BSkyB in the wake of the growing scandal over newspaper phone-hacking, the company announced on Wednesday.

The announcement came shortly before parliament was to debate a government-backed motion calling on Murdoch to halt his attempt to acquire the 61-per cent of BSkyB his company does not already own.

British Prime Minister David Cameron said on Wednesday a judge-led inquiry into phone hacking at Rupert Murdoch's papers will look at the relationship between politicians and the press.

Giving details for the first time since he announced the inquiry last week, he said it would cover 'the culture, practices and ethics of the press, their relationship with the police, the failure of the current system of regulation'.

It would also cover 'the contacts made, and discussions had, between national newspapers and politicians, why previous warnings about press misconduct were not heeded, and the issue of cross-media ownership', he told lawmakers.

Cameron said the inquiry, led by Lord Justice Brian Leveson, would have the power to summon 'newspaper reporters, management, proprietors, policemen and politicians of all parties to give evidence under oath and in public'.

The inquiry would report in one year, he said.

Murdoch shut down the News of the World tabloid last week amid spiralling allegations that it had hacked the phones of a murdered girl, and the families of dead soldiers and victims of terror attacks.

Cameron said that anyone involved in the scandal should be barred from British media ownership.

"The people involved, whether they were directly responsible for the wrongdoing, sanctioned it, or covered it up however high or low they go, must not only be brought to justice, they must also have no future role in the running of a media company in our country," he said.