Select committee also says James Murdoch showed 'wilful ignorance' of extent of phone hacking at News of the World

Rupert Murdoch is "not a fit person" to exercise stewardship of a major international company, a committee of MPs has concluded, in a report highly critical of the mogul and his son James's role in the News of the World phone-hacking affair.

The Commons culture, media and sport select committee also concluded that James Murdoch showed "wilful ignorance" of the extent of phone hacking during 2009 and 2010 – in a highly charged document that saw MPs split on party lines as regards the two Murdochs.

Labour MPs and the sole Liberal Democrat on the committee, Adrian Sanders, voted together in a bloc of six against the five Conservatives to insert the criticisms of Rupert Murdoch and toughen up the remarks about his son James. But the MPs were united in their criticism of other former News International employees.

The cross-party group of MPs said that Les Hinton, the former executive chairman of News International, was "complicit" in a cover-up at the newspaper group, and that Colin Myler, former editor of the News of the World, and the paper's ex-head of legal, Tom Crone, deliberately withheld crucial information and answered questions falsely. All three were accused of misleading parliament by the culture select committee.

Rupert Murdoch, the document said, "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."

James Murdoch is described as exhibiting a "lack of curiosity … wilful ignorance even" at the time of the negotiations surrounding the 2008 Gordon Taylor phone-hacking settlement and into 2009 and 2010. The younger son of Rupert Murdoch is criticised for failing to appreciate the significance of the News of the World hacking when the "for Neville" email first became public in 2009 and during subsequent investigations by parliament in February 2010 and a New York Times report in September 2010.

"We would add to these admissions 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," the select committee said.

Even if James Murdoch did not appreciate the significance of the £700,000 Taylor payout, the committee concluded it was "simply astonishing" that he did not realise that the "one 'rogue reporter' line was untrue" until late 2010, after a previous inquiry by the culture select committee which ran during 2009 and reported in February 2010.

According to minutes published by the committee, the MPs were almost unanimous in their criticism of Hinton, Myler and Crone.

Rebekah Brooks, the former News of the World editor and News International boss, was largely spared from the MPs' criticism. The report said that it would not draw conclusions on evidence to the committee about Milly Dowler, the murdered schoolgirl whose voicemail messages were hacked by the News of the World in 2002, because of an ongoing police investigation into Brooks.

However, the MPs said that Brooks must take responsibility for "the culture which permitted" unethical newsgathering methods over Dowler in 2002. The MPs said: "The attempts by the News of the World to get a scoop on Milly Dowler led to a considerable amount of police resource being redirected to the pursuit of false leads."

Brooks is on police bail after being arrested as part of Scotland Yard's investigation into phone hacking on 17 July 2011 and, separately, on suspicion of conspiracy to pervert the course of justice along with her husband, Charlie, on 13 March this year. Brooks denies knowledge of or involvement in phone hacking or other illegal activities.

The culture select committee charged Hinton with being "complicit" in a cover-up of wrongdoing at Rupert Murdoch's media empire.

MPs said that Myler and Crone deliberately withheld crucial information and answered falsely questions put by the committee.

The executives demonstrated contempt for parliament "in the most blatant fashion", the MPs said, in what they described as a corporate attempt to mislead the committee about the true extent of phone hacking at the News of the World.

The MPs said that Hinton, executive chairman of News International until December 2007, had "inexcusably" misled the committee over his role in authorising the £243,000 payout to Clive Goodman, the former royal editor convicted of phone hacking in January that year.

"We consider, therefore, that Les Hinton was complicit in the cover-up at News International, which included making misleading statements and giving a misleading picture to the committee," the MPs said.

Crone and Myler were accused of deliberately misleading the MPs on the culture select committee in 2009 and again in 2011 about their alleged knowledge that phone hacking went beyond a single "rogue reporter" at the now-closed Sunday tabloid.

"Both Tom Crone and Colin Myler deliberately avoided disclosing crucial information to the committee and, when asked to do, answered questions falsely," the MPs said in the report.

All three executives now face the prospect of being called to apologise before parliament, in a constitutional move that has not been used for almost half a century.

The report could prove especially problematic for Myler, who is only five months into his editorship at the New York Daily News.

The select committee said it would table a Commons motion asking parliament to endorse its conclusions about misleading evidence.

Myler said he stood by his evidence to the committee. "While I respect the work that the select committee has carried out, I stand by the evidence that I gave the committee. I have always sought to be accurate and consistent in what I have said to the committee," he said in a statement on Tuesday afternoon.

"The conclusions of the committee have, perhaps inevitably, been affected by the fragmented picture which has emerged from the various witnesses over successive appearances and by the constraints within which the committee had to conduct its procedure.

"These issues remain the subject of a police investigation and the Leveson judicial inquiry and I have every confidence that they will establish the truth in the fullness of time."

Hinton has issued a statement denying the allegations. "I am shocked and disappointed by the culture, media and sport select committee's allegations that I have misled parliament and was 'complicit' in a cover-up," he said.

"I refute these accusations utterly. I have always been truthful in my dealings with the committee and its findings are unfounded, unfair and erroneous.

"To be clear, not once in my testimony before the committee did I seek to mislead it or pass blame for decisions to others. Nor did I participate in a 'cover-up'. Furthermore, there is nothing in my evidence to support the committee's findings that I did. I will be writing to John Whittingdale, the chair of the committee, to object formally."

News Corp said in a statement: "News Corporation is carefully reviewing the select committee's report and will respond shortly. The company fully acknowledges significant wrongdoing at News of the World and apologises to everyone whose privacy was invaded."

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