LONDON, England - July 14, 2011 - Rupert Murdoch, for decades the UK's most powerful media mogul, faces losing his entire stake in British broadcasting after Ofcom announced it will apply a "fit and proper" test to his company's existing stake in BSkyB.
After nine days of revelations about the actions of its journalists, News Corporation finally bowed to unprecedented political and public pressure yesterday and withdrew its bid to gain 100% ownership of Britain's biggest broadcaster in terms of revenue.
The 80-year-old tycoon's humiliating climbdown came shortly before MPs from all parties were due to vote to call on him to make such a move.
In the Commons, former prime minister Gordon Brown made fresh allegations of illegality on an "industrial scale" at News International.
He pointed the finger at CEO Rebekah Brooks, who has been under pressure to quit because of her previous role as editor of News of the World when the phone of murdered teenager Milly Dowler was hacked into by the newspaper.
He condemned David Cameron for not taking part in the Commons debate and claimed he was "implicated" in the scandal because he employed former News of the World editor Andy Coulson as his director of communications.
Earlier, PM Cameron had announced the immediate setting up of a wide-ranging inquiry into media ethics and the police. The move by Ofcom to apply the "fit and proper persons" test, combined with allegations of widespread malpractice and cover-ups, has put in doubt News Corp's current 39% holding in BSkyB.
Murdoch pulled the plug on News of the World last week, and the prospect of losing his stake in BSkyB will fuel speculation that he may sell other newspapers in his empire.
The tycoon may have hoped that dropping the BSkyB bid might take some heat out of the scandal.
