Murdoch urged to drop BSkyB bid amid scandal

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Britain's Deputy Prime Minister Nick Clegg urged Rupert Murdoch on Monday to scrap his bid for satellite broadcaster BSkyB amid the tabloid phone-hacking scandal engulfing the media baron's empire.

Australian-born Murdoch is in London to take personal charge of dealing with the furore that forced the closure of the populist News of the World, Britain's biggest-selling weekly newspaper.

The government had looked set to decide in coming days on whether Murdoch's News Corporation should take full control of BSkyB by acquiring the 61 per cent it does not already own, but now faces calls to delay the ruling.

Clegg, the the Liberal Democrat party leader, called on Murdoch to "reconsider" the bid, saying it would be "decent and sensible" to do so.

"Rupert Murdoch is now in town in London seeking to sort things out," Clegg told BBC television after meeting the parents of murdered schoolgirl Milly Dowler, who was allegedly targeted by the hacking.

"I would simply say to him: look how people feel about this; look how the country has reacted with revulsion to the revelations. So do the decent and sensible thing and reconsider; think again about your bid for BSkyB."

His call comes as Culture Secretary Jeremy Hunt, upon whom the decision falls, consulted media and fair trading watchdogs to see whether their advice to him on the takeover still stood following the hacking scandal.

The News of the World had been dogged by allegations of voicemail hacking for years. A royal reporter and a private investigator were jailed in 2007.

Claims last week that Dowler and the families of dead soldiers were targeted escalated the affair into a national scandal engulfing the government, the press and the police.

The News of the World was closed down, publishing its final edition on Sunday after 168 years with the headline "Thank You and Goodbye".

Hunt has written to Ofcom, which regulates the telecommunications industry, and the Office of Fair Trading, seeking fresh advice on the BSkyB bid after the "stomach-churning" revelations.

"In the last week we have had some horrific revelations that I think have shocked everyone," he told BBC television.

"So what I'm doing today is I'm writing back to them and saying: 'Do you still stand behind the advice that you gave me before, that this deal should be allowed to go ahead, or are there some new facts that have emerged in the last week that would cause you to change that advice?'."

BSkyB shares plunged 7.6 per cent in London morning trading on Monday, slumping to 693 pence from 750 pence at the close on Friday. They later recovered slightly to 712 pence (down five per cent).

If the government waves through the deal, a price would still need to be agreed.

BSkyB, which has a portfolio including live English Premier League football and blockbuster films, is holding out for more than the £7.8 billion ($12.5 billion, 8.6 billion euros) offered by News Corp. last year at 700 pence a share.

Opposition leader Ed Miliband, the Labour Party chief, also called for Murdoch to drop the takeover bid.

He is threatening to force a vote in parliament's lower House of Commons on Wednesday on deferring the government's decision over BSkyB until after the police investigations have concluded.

"Whatever the twists and turns of the government, I will accept nothing less than some straight talking that this bid will not proceed until after the criminal investigation is complete," he told a press conference.

Police on Friday arrested Andy Coulson, a former News of the World editor who was Prime Minister David Cameron's media chief until he quit in January over the phone hacking allegations and claims of corruption.

Miliband said it was "imperative" that Cameron "comes clean" on the advice he took on appointing Coulson.

Meanwhile Dowler's parents called for one of Murdoch's lieutenants, former News of the World editor Rebekah Brooks, to resign from her position as chief executive of News International, News Corporation's British publishing arm.

She is set to be interviewed by police as a witness, according to reports.

"Their position is that she should take responsibility and do the honourable thing," the Dowlers' lawyer said.