JAMES Murdoch severed ties with his father's stable of British newspapers yesterday as he resigned from News International following fresh revelations of a corporate cover-up of the companyis involvement in phone hacking and bribery of public officials.
Mr Murdoch gave up his position as executive chairman of NI only two days after a senior police officer gave evidence that the news organisation presided over a 'culture of illegal payments' at The Sun.
The Leveson Inquiry into media standards also heard on Monday that NI's chief executive, Rebekah Brooks, was being privately briefed by Scotland Yard on its original phone-hacking inquiry into NI when she was editor of The Sun in 2006.
Ms Brooks, James Murdoch's immediate deputy before her resignation last summer, has been arrested and questioned by detectives working on the inquiries into hacking and bribery.
Yesterday's resignation means that James Murdoch no longer has a responsibility for the company amid growing expectation of an investigation by American authorities into the illicit practices of News Corp's British subsidiary.
James Murdoch, who remains as News Corp's deputy chief operating officer, will continue to have responsibility for international businesses including Star TV, Sky Deutschland, Sky Italia and BSkyB.
Rupert Murdoch said of his son in a statement: "We are all grateful for James's leadership at News International and across Europe and Asia, where he has made lasting contributions to the group's strategy in paid digital content and its efforts to improve and enhance governance programmes."
James Murdoch has had limited involvement in NI, which also publishes The Times and The Sunday Times, since he was promoted to a New York-based role in March last year.
One well-placed source compared that move to 'an SAS operation to remove a hostage from a vulnerable situation'.
Since then, James Murdoch was recalled to give evidence last July before a parliamentary committee on phone hacking, when he told MPs there were 'no immediate plans' to create a Sunday edition of The Sun in place of the News of the World.
When Rupert Murdoch flew to Britain to oversee last Sunday's launch of a new edition of The Sun, he pointedly left James behind and took his elder son, Lachlan, on a morale-boosting tour of the paper's newsroom.
In his own statement yesterday, James Murdoch linked the birth of the new paper to his departure.
"With the successful launch of The Sun on Sunday and new business practices in place across all titles, News International is now in a strong position to build on its successes in the future," he said.
Since reopening its investigation into NI, Scotland Yard has arrested two dozen former and current members of NI staff.
Deputy Assistant Commissioner Sue Akers told the Leveson Inquiry on Monday that the company financed a 'network of corrupted officials'.
One former NI executive said last night: "The real story here is the cover-up and conspiracy that News International could be culpable of."
The resignation of James Murdoch does not mean he will avoid Britain in future.
As chairman of BSkyB he will attend board meetings of the satellite broadcaster and he retains an office at its headquarters in Isleworth, west London.
The media analyst Douglas McCabe, of Enders Analysis, highlighted Mr Murdochis talents as a television executive and said he would be 'relieved' to concentrate on what he does best.
"It is about distancing him from News International and from problems at The Sun but he maintains his wider roles," he said.
"Within the broader context you have to remember that newspapers are a relatively small part of revenue and profits within News Corp as a whole."
Since succeeding Ms Brooks as chief executive of NI last summer, Tom Mockridge, a News Corp veteran, has tried to cleanse the company's reputation at its headquarters in Wapping, east London.