Two MPs on the culture, media and sport select committee have clashed in the deepening row over whether the committee had discussed the fitness of Rupert Murdoch to run an international company before the devastating criticism was tabled on Monday by the Labour MP Tom Watson.
Labour MPs and the single Liberal Democrat
on the committee, Adrian Sanders, voted to include the condemnation in their report with all four Conservative members opposing.
It has been argued that the wider criticisms of News International in the committee's report have been weakened by what can be described as a partisan report rather than an all-party verdict.
Speaking on BBC Newsnight on Tuesday, the Conservative MP Louise Mensch said the issue of whether Murdoch was a fit and proper person had not been discussed by the committee for a second or a moment before an amendment was tabled on Monday as the committee finalised its report.
But Paul Farrelly, one of the Labour MPs on the committee insisted on the Today programme on Wednesday morning that the issue had been discussed before Monday, saying the proposal had been tabled at Easter.
Farrelly had in his amendments focused on persuading the committee to conclude that Murdoch had been wilfully blind to the extent of phone hacking and the subsequent cover-up. He managed to gain the agreement of one Conservative MP for this motion. He said it was impossible to persuade some Tories on the committee to extend their criticism of News International to News Corp, the parent company.
The media regulator is currently examining whether Murdoch is a fit and proper person to hold a broadcast licence. The former chairman of the public administration select committee Tony Wright said it might have been better in the interests of keeping the committee united if the committee had merely invited Ofcom to examine the report's conclusions before deciding he was not a fit and proper person to run a company.
Mensch argued the committee took no evidence on the issue of being fit and proper, and had not even discussed the criteria or standard by which someone could be judged fit to run an international company.
News Corporation conceded that MPs had fastened on "hard truths" in the report into the phone-hacking scandal. The chastened media conglomerate accepted that the select committee was right to highlight "serious wrongdoing at the News of the World" and that its response to hacking allegations was "slow and too defensive". It also accepted the committee's verdict that former employees misled parliament, including the former editor of the News of the World.
But Murdoch's company adopted a more defensive tone in responding to the MPs' hostile description of its 81-year-old patriarch, noting that it considered the verdict "unjustified and highly partisan" because it was only agreed following a vote that saw Labour and the sole Liberal Democrat outvoting a Conservative bloc.
The criticism of Murdoch travelled around the world, with Murdoch titles such as the Times and the Wall Street Journal among those repeating the "not a fit person" quote prominently.
The remarks even had the apparently paradoxical effect of boosting News Corporation's share price in New York by 24 cents to $20.08 – a move some analysts put down to the belief that the day's events heralded the point where the company would sell its British newspapers.
The influential Wall Street media analyst Rich Greenfield said US investors "would love to see News Corp sell off their UK newspapers", including the Sun and the Times titles, and that a declaration by the media regulator Ofcom that the company is unfit to continue holding its 39.1% shareholding in BSkyB would allow it to raise cash in excess of its implied market value by selling down the stake.
In a memo to staff, Murdoch said he found it "difficult to read many of the report's findings". He added: "We certainly should have acted more quickly and aggressively to uncover wrongdoing. We deeply regret what took place and have taken our share of responsibility for not rectifying the situation sooner."
James Murdoch, once considered a certainty to take over from his father, was also subject to further criticism. The committee said he showed "wilful ignorance" of the extent of phone hacking between 2008 and 2010. The highly charged document is the first of a series of political, judicial and regulatory inquiries expected to conclude in the coming months.
According to the document, Rupert Murdoch "did not take steps to become fully informed about phone hacking" and "turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications".
The committee concluded that the culture of the company's newspapers "permeated from the top" and "speaks volumes about the lack of effective corporate governance at News Corporation and News International". That prompted the MPs' report to say: "We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of major international company."
Within the report there were also some passages critical of the Murdoch family that met with cross-party approval. One paragraph, approved by nine votes to one, said the committee found it "simply astonishing" that it took Rupert and James Murdoch at least two and a half years between 2008 and the end of 2010 to conclude that the company line – that hacking was confined to a single rogue reporter, the jailed former royal editor Clive Goodman – was "untrue".
The only dissenting voice was that of Therese Coffey, a Conservative MP. James Murdoch was accused of failing to appreciate the significance of the News of the World's hacking when he signed off the secret £700,000 phone-hacking payment to the chief executive of the Professional Footballers' Association, Gordon Taylor, in June 2008.
Similar accusations were levelled at Murdoch over the "for Neville" email, which appeared to show that hacking was more widespread than Goodman when it became public in 2009, and for his response to the investigations by parliament in February 2010 and the New York Times in September 2010.
The report continued to note that "as the head of a journalistic enterprise, we are astonished that James Murdoch did not seek more information or ask to see the evidence and counsel's opinion when he was briefed by Tom Crone and Colin Myler on the Gordon Taylor case". But allies of James Murdoch said he was pleased the criticism did not go any further, and in particular that the MPs did not conclude he had misled parliament.
That was reserved for three others. Les Hinton, the former executive chairman of News International and a lifelong associate of Rupert Murdoch, was "complicit" in a cover-up at the newspaper group, it said. It accused Colin Myler, a former editor of the News of the World, and the paper's ex-head of legal, Tom Crone, of deliberately withholding crucial information and answering questions falsely. Minutes published by the committee showed the MPs were unanimous in agreeing that Hinton, Myler and Crone had misled parliament – a charge all three men denied.
The committee will put forward an all-party motion to censure them before the Commons.
The Labour leader, Ed Miliband, urged Ofcom to speed up its investigation into whether News Corp is a "fit and proper" owner of the broadcasting licence held by BSkyB. "I take extremely seriously what the committee are saying," said Miliband. "They've gone through the evidence, they've reached a considered conclusion and I think now that what needs to happen is the regulator, Ofcom – and it is a matter for them – needs to come to its own conclusions."