It was only a few months ago that Rupert Murdoch’s attempt to takeover British satellite broadcaster, BSkyB was a done deal. After Britain’s Business Secretary Vincent Cable infamously told undercover reporters that he had “declared war” on Murdoch, charge of examining the bid was swiftly passed to another minister. With the government eager to show no sign of bias against the media titan, there were few doubts that the deal would go ahead.

Those hopes are now blown clean out of the water. News Corp, facing a backlash the like of which its rarely seen, said it would be withdrawing the bid. While the merger would have been in the best interest of both media organisations, it was “too difficult to progress in this climate,’ the company said in a shock announcement, and ahead of a parliamentary debate on the takeover. News Corp, which owns a 39.1% stake in BSkyB, said it remains committed to being a long-term shareholder in the broadcaster.

“I cannot think of a bigger humiliation for the quintessential media mogul,” Robert Peston, the BBC’s business reporter remarked on television, summing up the mood in London.

The latest developments came on another tumultuous day for the Murdoch media empire.

A senior U.S. senator is calling for the U.S. to investigate claims that the News of the World tabloid may have tapped into the phones of 9/11 victims. Jay Rockefeller, a Democrat who heads the Senate Commerce Committee warned of “severe consequences” should it be found the “offensive” and “serious” breach of journalism ethics, was found to be the case. “I encourage the appropriate agencies to investigate to ensure that Americans have not had their privacy violated,” he said in a statement.

It came as Britain’s three major parties rallied together in a rare share of unity to call on Murdoch to abandon his bid to take full control of the British satellite broadcaster, BSkyB. News Corp needed to “stop thinking about mergers and takeovers” and instead focus on the “mess” they’d created, Prime Minister David Cameron told a raucous gathering of Members of Parliament on Wednesday. He called for a “root and branch change” at News Corporation.

Earlier in the week, the government referred the bid to the Competition Commission, after Murdoch withdrew some of the compromises they had made earlier – widely seen as a move by News Corp to push back the controversial decision-making process until the public outrage died down.

Cameron also unveiled the details of a public inquiry that will run in parallel to the police inquiries currently taking place. The inquiry will examine what happened at the News of the World, and why past police inquiries into it failed. However, it will also have a more extensive remit, examining the state of the British media more widely, its plurality, its relationship with police and politicians, and what regulatory changes are needed. The inquiry, led by Lord Justice Leveson, will be able to call witnesses – from serving police officers, to politicians, journalists and media owners – to give evidence under oath.

However, it wasn’t only News International that was in the spotlight, with the Prime Minister himself taking a share of the criticism and anger in the House of Commons. He faced particularly sharp criticism over his hiring of Andy Coulson, the former News of the World editor he hired as his director of communications, but who resigned over the phone hacking scandal in January. Cameron’s strategy chief has been warned that Coulson had hired a private investigator with a criminal record. Cameron said that warning had not been passed on to him, but said that Coulson should be prosecuted should it turn out that the assurances he gave about knowing nothing about the wide-spread hacking while editor turned out to be lies.

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