Phone hacking: live report - update 2

"News Corporation is a diversified global media company with operations in sixindustry segments: cable network programming; filmed entertainment; television; direct broadcast satellite television; publishing; and other."

It highlights the financial impact that the phone hacking could have on the company if it gets a reputation for condoning illegal activities.

1501 GMT: More from Rupert M\'s statement:

"At no time do I remember being as sickened as when I heard what the Dowler family had to endure – nor do I recall being as angry as when I was told that the News of the World could have compounded their distress.

"I would like all the victims of phone hacking to know how completely and deeply sorry I am."

"I intend to work tirelessly to merit their forgiveness."

1458 GMT: Rupert M: Rebecca Brooks and Les Hinton "both asked to leave". About Rebecca Brooks, "She asked to leave. She had extreme anguish."

The payoffs? For Hinton "It would have been considerable. They are confidential."

James M: "There are no confidentiality agreements that would stop them cooperating with the enquiry. There is no evidence of impropriety."

1455 GMT: Have you paid money since then to Mulcaire and Goodman? "I was very surprised to find that certain contributions had been made."

Who signed the cheques? "I do not know.It would have been the management of the legal cases."

Rupert M: "It would not have come to the managing editor."

James M: "I was as surprised as you are that the payments were made?

Could it have been Les Hinton (who signed the cheques)? Rupert M: "It could have been Les Hinton. It would have been on the approval of the chief legal officer."

1453 GMT: News Corporation has sent round the statement that Rupert Murdoch was refused permission to make at the start, Here are some extracts:

"This is the most humble day of my career. After all that has happened, I know we need to be here today.

"Before going further, James and I would like to say how sorry we are for what hashappened – especially with regard to listening to the voicemail of victims of crime.

"My company has 52,000 employees. I have led it for 57 years and I have made my share of mistakes.

"I have lived in many countries, employed thousands of honest and hardworking journalists, owned nearly 200 newspapers and followed countless stories about people and families around the world."

1450 GMT: Did News Intl pay Clive Goodman\'s fees for his trial? James M: "I don\'t have direct knowledge of that.

"It is customary in certain instance with employees to pay certain legal expenses. Since I have had knowledge it has all been done with legal advice."

1448 GMT: Rupert Murdoch says that perhaps he might have called the News of the World editor only once a month. He wouldn\'t expect to told about a "600,000 pounds settlement" with Gordon Taylor.

So what would you talk about?

"I would say \'what\'s doing?\' Maybe he would say \'I\'m adding pages for football\'."

1453 GMT: How often would you speak to the editors of your newspapers. Rupert M: "I would sometimes call the News of the World Editor on Saturdays and the Sunday Times every Saturday.

"Not to influence them. I am not in touch. To say that I am hands on is wrong. News of the World I lost sight of, maybe because it\'s so small in the general frame of our company."

The editor he speaks to most frequently is the editor of the Wall Street Journal as both men are in New York.

1440 GMT: Why was lawyer Tom Crone sacked? "I don\'t have knowledge of it."

1439 GMT: James M: "It was the later civil processes that unearthed the additional information. As soon as had that information at the end of 2010 we acted on it"

1438 GMT: Asked why the settlement with Gordon Taylor, head of the Professional Footballers\'Association, was made confidential, James M says: "The confidential nature of the settlement was a normal thing in out of court settlements."

1433 GMT: James M says he first became aware that phone hacking was more widespread than initially thought when the company received civil claims last year for compensation from phone hacking victims.

1431 GMT: James M: "We have no immediate plans for a new tabloid Sunday newspaper" to replace the News of the World.

"It has come up in the company but this is not the time to be worrying about that. The company has to get to grips with all these allegations."

Rupert M: "This country does greatly benefit from having a competitive press and therefore a transparent society. That is sometimes inconvenient to some people but it\'s stronger for it."

1425 GMT: Rupert M: "Each paper had an editorial manager with authority to approve reporters\' expenses." A reporter does not have authority, he says.

1423 GMT: Asked about News of the World\'s use of non-invoiced payments, James M: "Sometimes it is appropriate for journalists to have the ability to use cash but I don\'t have direct knowledge."

1421 GMT: Rupert M is giving deep reflection to each question before replying. James M is taking a more dynamic pro-active approach, eager to give a full answer to every question.

1417 GMT: James M: "The out of court settlement on Mr (Gordon) Taylor was related to a phone interception by Mr Mulcaire so the underlying interception was not disputed."

"Legal advice was that it was likely that the case could be lost for a total cost of around 500,000 to a million pounds."

"There was no reason to believe anything other than that phone interceptions were in the past... and that settlements could be made without going to the head company.

"I directed that it was all right to settle those cases. I did not get involved with the negotiations."

1415 GMT: Rupert M says there is "no evidence at all" that victims of the 9/11 terrorist attacks were hacked.

"We have seen no evidence of that at all and as far as we know the FBI haven\'t either," Murdoch said. "If they do, we will treat it exactly the same way as we treat it here.

"I cannot believe it happened from anyone in America. Whether someone from the News of the World or Mr Mulcaire took it on himself to do it, I don\'t know."

1413 GMT: Asked by Jim Sheridan MP "Do you accept that ultimately you are responsible for this whole fiasco?", Murdoch tersely replied: "No".

When asked who he blamed, Murdoch said: "The people that I trusted to run it (his media empire) and then maybe the people they trusted."

"I knew Mr (Les) Hinton (former News International chairman) 52 years and I would trust him with my life."

1406 GMT: Rupert Murdoch says he visited 10 Downing Street by the back door because he was asked. "I was asked would I come in by the back door."

1403 GMT: Why were more people not sacked when the extent of the phone sacking became known? James M: "Most of them, some of them had already left."

Why did 200 people lose their jobs (when the News of the World closed)?

Rupert M: "We felt ashamed about what had happened. We had broken our trust with our readers."

1401 GMT: Asked when he became aware of the full extent of the phone hacking at the News of the World, Rupert M says: "The police have not given us the Mulcaire diaries (the notes of phone hacker Glenn Mulcaire) so we do know know what they contain.

"We are 100 percent cooperating with the police investigation."

1359 GMT: Rupert M: "I was shocked, appalled and shamed when I heard about the Milly Dowler case only two weeks ago. I was graciously received by the Dowlers."

1358 GMT: Was Rupert M informed of payments made to phone hacking victims Gordon Taylor and Max Clifford? "Nope"

James M: "My father became aware following the out of court settlement. It\'s something the executives in that country would be authorised to make. It\'s below the approval threshhold."

1356 GMT: "Who was aware of findings by Harbottle and Lewis which investigated phone hacking on behalf of the company."

Rupert M: "Top legal officers."

1353 GMT: Rupert M says he was unaware of court criticism of Neville Thurlbeck, the News of the World reporter in a story about Formula One motor racing supermo Max Mosley.

1351 GMT: Rupert M said he did not investigate Rebekah Brooks\' admission that the News of the World had paid police officers for information because he was unaware of her statement.

"News of the World is less than 1 percent of our company. We employ 53,000 people around the world."

1349 GMT: James M: "There is no evidence that I have knowledge of that Mr (Les) Hinton or Mrs (Rebekah) Brooks did anything inappropriate."

1347 GMT: Whittingdale: "Who else at the News of the World was involved in phone hacking apart from Clive Goodman (who was jailed)?"

James M: "There have been a number of arrests. These are matters for criminal investigations." News Intl has set up its own internal operation to deal with the phone hacking repercussions, he says.

1340 GMT: James M, asked why he said earlier he had not been in full possession of the facts: "When the Sienna Miller case came up we alerted the police and they restarted the investigation.

"We have set up a compensation scheme for legitimate claims from the victims.

"When I said earlier that I was not in full possession of the facts it was in that civil trial that those facts emerged and the company acted as swiftly as possible."

1339 GMT: James Murdoch: "I want to say how sorry I am and how sorry we are to the victims of illegal phone interceptions. It is our determination to put things right."

Rupert Murdoch interrupts: "This is the most humble day of my life."

1337 GMT: Whittingdale welcomes Rupert and James Murdoch. Rupert Murdoch thanks him.

1334 GMT: Whiitingdale refuses, and says they can make a statement at the end. James Murdoch asks to submit a written statement and Whittingdale agrees.

1333 GMT: James Murdoch asks to make a statement.

1325 GMT: The Wilson Room, where the Murdochs will be grilled, is jampacked with 100 or so newspaper journalists and 70 members of the public, AFP\'s Nick Morrison reports.

1321 GMT: The Murdochs initially refused to appear before the committee but relented after they were formally summoned.

John Whittingdale, chairman of the Culture has promised "forensic" questioning amid public anger over the hacking of crime victims, celebrities and royals.

1320 GMT: Rupert Murdoch, due to start giving evidence in 10 minutes\' times, has reportedly engaged public relations consultants to train him for Tuesday\'s session.

James Murdoch, chief executive of News Corp\'s Europe and Asia operations, promises to be the focus of scrutiny over payments he reportedly approved to the victims of hacking.

The flame-haired Brooks, who quit as chief executive of News International on Friday, will also be taken to task for her remarks before the same committee in 2003 when she admitted police had been paid for stories.

1317 GMT: Yates: "I have worked out in hindsight that my phone may have been hacked" though it never occurred to him when he was reviewing the initial enquiry.

1315 GMT: In a further tragic twist, police are investigating the unexplained death of whistleblower Sean Hoare, a former reporter at the tabloid who first implicated Cameron\'s ex-spokesman Andy Coulson in the phone hacking scandal.

1313 GMT: Websites owned by Rupert Murdoch\'s News International are back up after hit by the Lulz Security hacker group which replaced The Sun\'s online version with a fake story pronouncing the mogul\'s death.

The British tabloid quickly took down reports that the 80-year-old had been found dead in his garden after ingesting palladium but visitors to the site were redirected to LulzSec\'s Twitter feed, which celebrated the high-profile attack.

1309 GMT: More from David Cameron in Lagos: "I don\'t underestimate the problems."

"Parts of the media committed dreadful, illegal acts. The police have serious questions to answer about potential corruption and about a failed investigation. Politicians have been too close to media owners."

Cameron is to fly home later in the afternoon after cutting his trip short to deal with the hacking scandal, which has overshadowed his visit to Africa aimed at promoting trade.

Cameron has ordered a judge-led inquiry into the phone hacking scandal, and will announce further details in the House of Commons tomorrow.

1306 GMT: Yates\'s relationship with Wallis: "We did become friends, in about 2000. I would see him about two or three times a year." He denies being a close friend.

1303 GMT: Yates says he asked Wallis whether there was anything in the Guardian\'s reports that could be embarrassing and "I received a categorical assurance" that there wasn\'t.

"I did not have a scintilla of concern. I did not raise any concerns because I did not have a scintilla of concern."

He received a CV from Wallis\'s daughter and passed it on to human resources. "I deny that I secured her a job. I had nothing to do with her employment. I was simply a postbox."

1301 GMT: Assistant Commissoner John Yates, who resigned yesterday, says: "My integrity is intact and my conscience is clear."

1258 GMT: News Corp is considering elevating Chief Operating Officer Chase Carey to chief executive officer to succeed Rupert Murdoch, Bloomberg News reports, citing people with knowledge of the situation.

"A decision hasn’t been made and a move depends in part on Murdoch’s performance before the U.K. Parliament today, said the people, who weren’t authorized to speak publicly. Murdoch would remain chairman, the people said."

1259 GMT: Fedorcio\'s testimony ends. Yates begins his testimony.

1256 GMT: Fedorcio says he would not have hired Wallis if he knew then what he knows now.

1255 GMT: Wallis suspended his contract himself last September after New York Times reports about phone hacking, Fedorcio says.

1248 GMT: Blackwood: "Why did you select Yates to do due diligence?"

Fedorcio: "Because he had been leading the work on phone hacking and he seemed appropriate. He is an officer of the highest integrity."

"Were you aware he had been a close friend of Mr Wallis since 1998"

"I knew he was a friend but did not know he had been a friend since 1998."

"I can\'t recall who suggested that I hire Mr Wallis." It was "certainly not" Rebekah Brooks.

1246 GMT: He e-mailed three people -- Wallis and two others -- inviting them to bid for the contract. Under Met rules, a minimum of three bids have to be sought for a contract.

"At that stage Wallis had just left the News of the World and just set up on his own and was looking for contracts."

1243 GMT: Fedoricio denies that he hired Wallis to help deal with the fallout from the phone hacking scandal. "I never discussed phone hacking with Mr Wallis."

He hired Wallis to help with the Met\'s corporate affairs.

1235 GMT: Fedorcio confirms that Wallis was hired in September 2009, two months after Yates had reviewed the original phone hacking inquiry.

"I asked John Yates about Mr Wallis who gave him a categorical assurance that there was nothing about phone hacking that could be embarrassing."

"As far as he was concerned, having spoken to Mr Wallis, there was nothing that could be embarrassing."

1234 GMT: Vaz "But why Wallis?"

Fedorcio: "I had met him on a number of occasions. I had known him since 1997. Someone told me he was available. He was not a personal friend that I socialised with after work."

1230 GMT: Vaz: "Why did you emply Wallis?"

Fedorcio: "I was informed a couple of hours ago that I have been referred to the police complaints commission and I have not had a chance to have independent legal advice as others may have done."

Vaz reassures him that he can speak freely.

"The need that I had for external advice and support was that my deputy had quite serious illness. I was under great pressure working long hours. I had been looking for some time to find someone who had the right background and knowledge."

1230 GMT: Stephenson ends his evidence and Dick Fedorcio takes over.

1228 GMT: Why did Stephenson resign? "These are huge events for the Met. I sincerely regret that Mr Yates has gone

"The Met will recover. It has around 50,000 people. Interim arrangments have been put in place.

"We need to make changes in the way we handle media. Much more transparently.

"I\'m going because I\'m a leader. Leadership is not about popularity, the press, or spinning - it\'s about making decisions that put your organisation, it\'s mission, and the people you lead first - it\'s about doing things that will allow them to be proud of their leaders, and this is much different than mere popularity.

"Today\'s almost certainly my final professional public engagement after almost 36 years of policing."

1225 GMT: Ten out of 45 staff at the Met\'s press and PR department (DPA) have worked for the News of the World, either as staff or on work experience, Stephenson says.

1222 GMT: Stephenson says he remembers no particular remarks or parameters that he set for Yates when he asked him to reopen the inquiry.

"He is one of the most senior police officers in the land. I just had a telephone conversation with him."

1220 GMT: Prime Minister David Cameron, in Nigeria, says the hacking scandal is a "big problem" but will be resolved.

1218 GMT: The "hideous nature" of some of the allegations "would have made it a priority" had he been aware of them, Stephenson said. The mobile phone of teenage murder victim Milly Dowler is among those alleged to have been hacked.

1215 GMT: He did not hear that there are "bin bags" full of phone hacking evidence until after Operation Weeting was opened in January this year .

1212 GMT: Stephenson: "I had no way of knowing that the original investigation was so narrow."

1210 GMT: Norman Fowler, a former Conservative minister under Margaret Thatcher in the 1980s and now a member of the House of Lords, the upper house of parliament, says he expects a "good performance" from Murdoch.

Fowler was part of a Lord committee that travelled to New York in 2007 to interview Murdoch.

"I think he will give a good performance and a relaxed performance and I think it would be a great mistake to underestimate the man," he said.

But Fowler believes the committee is "only a step and the most important step is the public inquiry to follow."

1207 GMT: AFP\'s Nick Morrison spots a group of Socialist Worker campaigners outside, chanting: "Say hey, ho, Rupert Murdoch\'s got to go!"

Right to Work campaigners alongside have turned up with placards reading: \'Smash Murdoch\'s evil empire\' and \'Jail corrupt cops, not protesters.\'

1207 GMT: "Yes I do accept" with hindsight that the Met should have reopened the original investigation.

1205 GMT: Stephenson said he knew Yates was friendly with Wallis but "it was not relevant" when he asked Yates to "establish the facts" of phone hacking.

There was no reason to think the original operation was not a success. "People were sent to prison for it."

1203 GMT: Andy Thompson, 40, managing director of Canadian theatre company The Virtual Stage, said he was on a working holiday to London to see West End shows but decided to attend the hearing after friends said it was open to the public.

"This is the best show in town this afternoon," he said.

"How often do you get a chance to sit in a room with the Murdochs and Rebekah Brooks while they get grilled by MPs? It\'s a completely historic day to be in London."

1201 GMT: Blackwood: "Were relations (with the media) clouded by friendship?"

"I have no reason to doubt the assurances given by Mr Yates" about his relationship with Wallis.

1159 GMT: Tom Miller, 22, law student in the queue for the hearing: On phone hacking: "It\'s obviously wrong but I can understand that it goes on because of competition to get stories.

"But, while I want the truth to come out about hacking, if the press are going to be terrified of going to jail after this then that\'s not a good thing.

"I do believe the Murdochs and Rebekah Brooks should be held to account but I also think freedom of the press is paramount."

1157 GMT: AFP\'s Nick Morrison, at Portcullis House, reports: "Jemima Khan has just arrived, surrounded by crowds of photographers, flashbulbs popping."

1156 GMT: "I have never had a conversation with Mr Wallis about phone hacking." Stephenson says the committee will have to ask Fedorcio how Wallis came to be employed by the Met.

1154 GMT: "I have no information that the Metropolitan Police was engaged in a conspiracy" to hush up phone hacking, he says, adding that he received repeated assurances that there was nothing new in the Guardian\'s 2009 reports.

1151 GMT: Asked why his Champneys stay does not yet appear in the Met police\'s hospitality files, Stephenson said: "I made sure it was put in the hospitality register and it will be published in the next quarter\'s publication."

1148 GMT: Around 40 members of the public were queueing up outside Portcullis House, a modern office block across the road from the Houses of Parliament, where Rupert and James Murdoch are due to be questioned.

Rupert Murdoch, Australian-born chairman and chief executive of his News Corporation global media empire, is due to appear in the Wilson Room at 2:30pm (1330 GMT).

Murdoch\'s car was mobbed by photographers as it arrived at the building and then sped off again. It was not clear if he had managed to get in another way.

1147 GMT: Stephenson says he was told that News International publications had 42 percent of newspaper readership and so he thought it was important to have a relationship with him.

1144 GMT: Did you try and persuade The Guardian that its coverage of phone hacking was exaggerated?

"Yes. Mr Yates gave me assurances that there was nothing new in the Guardian\'s report. Mr Yates will tell you that himself."

1141 GMT: James Clappison MP asks about Stephenson\'s 18 dinners with News International staff and seven or eight with Wallis. "Was that necessary?"

Stephenson: "We meet with media to enhance the reputation of the Met," establish context and several other reasons.

"But I accept that we need to change the way we do it."

1139 GMT: David Winnick MP: "Is it not inappropriate for any police officer to receive substantial hospitality?" like the commissioner\'s five week stay at Champneys.

Stephenson: "It was a family connection. It was very generous. It enabled me to get back to work. It was not a secret. It was declared."

1136 GMT: "I don\'t agree" that accepting hospitality from Champneys health farm was not the best thing to do. "I had a serious injury and was wheelchair bound.I wanted to get back to work as soon as possible."

1132 GMT: Nicola Blackwood MP cites a 2006 report which found evidence of "widespread and organised undercover marketing of confidential information" to the media.

It identified 228 transactions with various newspapers including the News of the World., she says, asking him whether that did not mean he should have taken phone hacking more seriously.

Stephenson says "even with that report" phone hacking was not a major priorioty like counter terrorism operations and Stephen Lawrence.

1128 GMT: "I most certainly did not tell the Mayor" (Boris Johnson) about the imminent arrest of Rebekah Brooks. The reason is that I would not want to compromise the Mayor ."

1121 GMT: Stephenson says he knew of Rebekah Brooks\' arrest "maybe a day or two days" beforehand. "That is entirely proper."

Of his failure to report the hiring of Wallis to Home Secretary Theresa May, he said: "I\'m fully aware it has been interpreted negatively."

Stephenson said the contract with Wallis only became relevant when he was linked to the phone hacking investigation.

But "there was no suggestion that Wallis was involved in phone hacking. News International said it was a tiny issue."

1120 GMT: He was given assurance by a senior police officer that there was nothing new in the phone hacking investigation, so saw no need to query the appointment of Wallis.

1116 GMT: When he took office as commissioner he asked for briefings on various subjects from counter terrorism to the murder of black teenager Stephen Lawrence but never thought that phone hacking was a major problem, so never looked into it.

1114 GMT: On Prime Minister David Cameron\'s employment of former News of the World editor Andy Coulson, Stephenson denied having taken a swipe at Cameron in his resignation statement.

But he added: "Wallis was never employed to provide personal advice to me. He was employed in a minor role."

"When Coulson resigned as News of the World editor he was associating his name with hacking" whereas Wallis had never at that time been linked to hacking.

1113 GMT: His resignation was against the advice of many people "including my wife".

1111 GMT: He is "not apologetic" for his stay at Champneys health farm but when he became aware that Neil Wallis was connected with Champneys he felt it was significant.

1110 GMT: Stephenson says a decision had to be made quickly because of the importance of the build up to next year\'s London Olympics.

1108: GMT: Stephenson: "When I took the post I was clear that I would never allow the story to be about me. Clearly there have been very significant stories about me."

1107 GMT: Committee chairman Keith Vaz MP says he was invited to the News International summer party but did not attend.

1105 GMT: People enter the Grimond Room, where the Home Affairs Committee will meet, and take their seats.

1104 GMT: Labour leader Ed Miliband tweets: "What people will want to know is whether James and Rupert Murdoch have some remorse for what happened and to account for what they knew."

1102 GMT: Max Beckham, 21, a student from London, was at the front of the public queue for the Culture committee hearing at Portcullis House in Westminster after being the first to arrive at 6.30 am.

"I\'m looking forward to seeing Rupert Murdoch - he\'s the one at the top so to have him under the spotlight is important.

"I don\'t think a lot is going to come out of it though - he\'s a professional, he knows what he\'s doing," Max says. "But I want to be here for the atmosphere and because it\'s a historic occasion."

1100 GMT: Welcome to AFP\'s live report on hearings by two British parliamentary select committees into phone hacking at the News of the World and alleged payment of police officers.

The Home Affairs Committee, beginning at 12 noon, will quiz Sir Paul Stephenson, who has resigned as Metropolitan Police Commissioner after the revelation that the Metropolitan Police hired former News of the World Neil Wallis as a consultant.

Also facing questioning by that committee is John Yates, who stood down yesterday as Assistant Commissioner at the Met and Dick Fedorcio, the Met\'s Director of Public Affairs and Internal Communication.

The Culture, Media and Sport Committee, starting at 2.30 pm, will grill Rupert Murdoch, chairman of News Corporation, and his son James, chairman of UK subsidiary News International, through which the group owned the News of the World.

Rebecca Brooks, former News International chief executive, will also appear, despite having been arrested on Sunday and interviewed by police for several hours.

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