The chances that Rupert Murdoch would choose to shut a 168-year-old newspaper, a profitable one at that, are nil. The News of the World's closure is a sure sign that the man at the top, known for calling all the shots himself, isn't alone any more.

News Corp is a family-run company – and, more and more, a family imbroglio. Some of the intrigue: Rupert has ceded substantial power to his son James, who made the decision to close the NoW. While James's power is part of a calculated succession plan, he also has his own leverage: he is his father's closest family ally in accommodating Wendi, the patriarch's divisive third wife. His father needs his support.

James has an often tense relationship with his sister, Elisabeth, who has a tense relationship with Wendi. Elisabeth has built her own media company, which her father bought this year, giving her great say within the company. James and Elisabeth's relationship, indeed many of the family relationships, are facilitated by Elisabeth's husband Matthew Freud, the most famous, and most famously slippery, PR man in London. One of Freud's closest friends is Rebekah Brooks, the CEO of News International, who almost everybody believes needs to be fired.

Rebekah, counselled by Matthew, has become James's most dedicated lieutenant. James and Matthew are determined not to fire her (indeed, she is an important instrument in Matthew's business).

As it happens, Wendi doesn't like Rebekah. Rupert, who has described Rebekah as a social climber in his family, can't press for her ousting for fear of siding with Wendi against his children.

Rupert's oldest son, Lachlan, once the presumed heir and now a sullen presence in Australia, fights with his brother and is most closely aligned with his sister Elisabeth. Their older half-sister, Prudence, is aligned with James. Ultimately, they will have four votes between them when it comes to running the company, with no tie-breaking mechanism.

Just as the NoW was a throwback to another era of lawless newsrooms, News Corp is a throwback to an insular and Byzantine family rule, and a them-versus-us relationship to the world. We don't apologise, don't accommodate – we wield our power: that is the Murdochian view. To them, the campaign against the NoW is a campaign by Murdoch's enemies.

The embattled Murdochs – and that is how they see themselves – have denied, stonewalled, stood tough, no matter that virtually every statement they've made about the unfolding scandal has been contradicted by events to come. If there's regret on their part, it's not so much about breaking the law, as it is about giving their enemies a weapon. Shutting the paper down is, they hope, a way to take away that weapon.

James seeks to be his father. He's Rupert without the subtlety – quite something to think about. Even his father was gobsmacked when, during the 2010 general election campaign, James publicly upbraided the editor of the Independent for his paper's coverage of News Corp.

Rupert has watched much of the phone-hacking scandal unfold from afar. And he's been grumpy about it, often complaining to Robert Thompson, the Wall Street Journal editor, about how James has been handling the mess. That's one reason James doesn't much like Thompson or his father's other advisers. He sees himself as his father's adviser, and their advice often leads to his interference. In this he has the support of his siblings, who don't like their father's interference either. (Two of Rupert's key confidantes, his communications chief, Gary Ginsberg, and general counsel, Lon Jacobs, lost their jobs this year in part because they didn't get along with James.)

Recently the Murdochs have started to refer to the hacking scandal as a crisis as serious as News Corp's near-bankruptcy in the early 90s – in family lore one of Rupert's finest moments. That, however, was a crisis resolved by negotiation, cutting deals, and leveraging strength. Rupert is at his best when talking power to power (one reason why the BSkyB deal seems still viable).

But this crisis is about public perception and trust, which is not, to say the least, Rupert's nor his son's métier. Family insiders say it was Freud who suggested closing the paper. He is said to have described it to James as a "Wapping" approach – that is, when Rupert in the dead of night moved his British papers to Wapping to break the print unions.

Closing the NoW may be the first instance of proactive PR strategising during the scandal, but it is probably too little too late. Credibility may be restored, and the public cry for blood sated, only when the company is no longer run by someone named Murdoch.

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