Hello, and welcome to today's live coverage of the continued crisis in Rupert Murdoch's media empire, the day after Murdoch abandoned News Corporation's bid for 100% of BSkyB.

To recap the main developments from this morning and yesterday:

• Nick Clegg, the deputy prime minister, has said that Rupert Murdoch should appear before the Commons culture, media and sport committee to answer questions about the phone hacking scandal that led to the closure of the News of the World. Clegg said today that Murdoch had "big questions" to answer after the scandal forced him to drop his bid for full control of BSkyB yesterday. The committee has asked Murdoch to appear next week with his son James and Rebekah Brooks, the chief executive of News International, Murdoch's British newspaper arm. Clegg said the three should appear "if they have any shred of sense of responsibility or accountability for their position of power".

• Rupert Murdoch abandoned his bid to buy the whole of BSkyB yesterday. News Corporation announced that it was withdrawing its bid only a few hours before the start of a Commons debate that saw all three major parties supporting a motion saying that the bid would not be "in the public interest".

• David Cameron launched a wide-ranging inquiry into media standards. It will be headed by Lord Justice Leveson and it will take place in two parts. The first part will cover the "culture, practices and ethics of the press" generally and Cameron wants it to report within a year. It will have the power to summon witnesses, and Cameron said that he expected politicians and newspaper proprietors to be called to give evidence, saying: "If you own the media in this country, you should be able to be called under oath." This has been interpreted as a call for Murdoch to appear.

• MPs passed a motion opposing Murdoch's bid for BSkyB. During the parliamentary debate Gordon Brown accused the civil service of blocking his attempts to hold an inquiry into phone hacking before the election. He asked Sir Gus O'Donnell, the cabinet secretary, to look into setting up an inquiry but was advised not to set one up.

• Ed Miliband accused Cameron of making a "catastrophic error of judgment" when he gave Andy Coulson a post in Downing Street. At PMQs, Miliband accused Cameron of ignoring warnings his staff had received from the Guardian about Coulson.

• Senior US politicians called for the Justice Department, the FBI and Congressional hearings to investigate allegations that the News of the World hacked phones and bribed police officers. Amid signs that the scandal is becoming a major issue in the US, the families of victims of the 9/11 terror attacks also backed demands for an investigation following claims that the phones of those killed had been targeted by the UK tabloid. A number of key members of the family that controlled the Wall Street Journal said they would not have agreed to sell the newspaper to Murdoch is they had been aware of News International's conduct over phone hacking at the time.

Breaking: A 60-year-old man was arrested in London this morning by detectives investigating phone hacking at the News of the World. More as we get it.

Nick Clegg is giving a speech in central London now on phone hacking. He says all parties now have a rare opportunity to work together to reform the media.

His three principles for reform of the media:

1. Press freedom. "The lifeblood of liberal democracy." He says the last week has been a triumph for proper investigative reporting. Journalists will never be shrinking violets and papers will never be owned by angels, he says. He does not want to live in a society where politicians feel comfortable with the press.

2. Accountability. This has improved in other areas of the economy: financial services and the police are now far more accountable. But the media has not kept up. It has "institutionalised immunity" from the basic standards of the rest of the country, Clegg claims. Corporate governance for the media needs to be examined.

Something must be wrong when misconduct and lawbreaking can be endemic in an organisation while senior staff do nothing, he says.

He thinks we need to address a lack of clarity over what it means to be "fit and proper" to own media companies.

The PCC has failed, he says. It is only a limited complaints body. If a member of the public is shocked by the treatment of Kate Middleton (above), they can't complain. Only Kate can complain. Clegg thinks that's crazy.

We need an independent body, he says, with proper sanctions including financial penalties.

Scrutiny needs to extend to dealings between press, politicians and police. Civil servants and advisers will have to record their meetings with media figures.

On to the police. The Met has a big job winning back public confidence, Clegg says. If information was obtained in the public interest there may be a case for a custodial sentence, Clegg suggests.

3. Plurality. A corporate monopoly threatens democracy almost as much as a state monopoly does. Traditional media still matters, he says – it's still responsible for the majority of original journalism. The plurality test – why doesn't it cover companies that expand their market share naturally through market growth? We should also look at the way competition law operates, Clegg says.

The hacking scandals will no doubt continue but we must stay focused on the endgame: getting the ball rolling while the demand for change is still strong to rebuild confidence in our media institutions and make sure this never happens again, Clegg says.

Questions from the media. Is he saying the public should stop buying and watching News Corp products? Clegg says the public has realised the media was invading their privacy. They are disgusted and feel revulsion, he says. They are looking at what they are reading with a cynicism that was not there before, and that is healthy, he says.

Do the Tories agree with his proposals today? He says what he has said on the Press Complaints Commission and plurality and transparency is "not that radical" and "long overdue".

What was Clegg's warning to David Cameron about hiring and Andy Coulson?

He won't be drawn on specifics. But he says he had "serious misgivings" about "allegations of hacking and so forth ... Of course we discussed this". But he and Cameron don't vet each other's advisers. "It was his decision and his decision alone, for which he takes responsibility."

Is News Corp fit and proper to own its existing 39% stake in BSkyB?

"Fit and proper" is not a clearly defined concept in law, he says, and we need "greater clarity" on that. It has been developed in other domains, such as financial services.

The Lib Dems have been the most outspoken on this issue, he says. At every single turn we were blocked, "by the bigger vested interests in politics ... who didn't want to open that Pandora's box." This is now an opportunity, he says, to do things better in the future.

Should parliament take on new powers to compel people to attend select committee hearings? "Let's see what happens," Clegg says. "We don't know if the individuals who have been asked to attend will refuse or not" – a reference to Rupert and James Murdoch and Rebekah Brooks. When you give people power and they think they can act without being held to account that will always go wrong, Clegg says. They should make themselves available for questioning, he says.

He says he has an enormous amount of sympathy for Gordon and Sarah Brown about the publication of details about his son's illness. But on his speech yesterday "I sensed a whiff of rewriting history ... Are we really supposed to believe that for 13 years he was hamstrung by dastardly officials? ... There were many other things that he wanted to do over those years that he just "bulldozed through". Not on phone hacking or regulation of the media, Clegg says.

To Brooks and Murdoch he says: "Do the decent thing ... When you're in that position of power, you are also accountable ... Make yourself available."

Is Vince Cable owed an apology now for being punished for saying he had "declared war on Murdoch", when he had the responsibility for deciding whether News Corp should take over BSkyB?

Clegg does not give a clear answer. "Do I think that Vince's misgivings about the proposed deal have been vindicated?" he muses, without answering. "Was it a deal serious enough to elicit serious scrutiny? You bet."

That's it from Clegg. Coming up today:

• It is expected that Rebekah Brooks may be called to give evidence to the Commons media committee.

• The advice given by cabinet secretary Gus O'Donnell to former prime minister Gordon Brown suggesting Brown should not hold a judicial inquiry into phone hacking may be published today.

• The Metropolitan police authority is meeting at 2.30pm and may make an emergency motion about hacking.

• We will also be watching the US for any moves by the attorney general, Eric Holder, or other US politicians or bodies, against Murdoch's companies.

The BBC points out that at one point Nick Clegg accidentally called Rupert Murdoch's company "News Corpse".

Over at Bloggingheads, Reuters media blogger Felix Salmon describes the hacking scandal as "the UK's Arab Spring". Academic Henry Farrell likens it to the child abuse scandal in Catholic church in Ireland.

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My colleague Andrew Sparrow has more details of Nick Clegg's interview on Radio 4 this morning, during which he said Rupert Murdoch, James Murdoch and Rebekah Brooks should give evidence to the Commons culture committee. He said it was not clear whether parliament had the ability to force them to attend. But they should do so voluntarily, he said. Here's the key quote:

If they have any shred of sense of responsibility or accountability for their position of power, then they should come and explain themselves before a select committee.

On changes to the Press Complaints Commission, the deputy prime minister called it "far too weak", and he said that the Lib Dems had never been in thrall to Murdoch.

To be far, I've been criticised for many things in my time, but the idea that Liberal Democrats have been in the pockets of media moguls ... not least because they were perhaps not very interested in having us in their pockets in the first place. We've actually been talking about this for years and years and years.

Andy also points out that John Whittingdale, the chairman of the Commons culture committee, was on BBC News earlier explaining what the position is in terms of the Murdochs and Brooks being compelled to attend the select committee.

The committee has invited the three to attend, and asked them to reply by 9.30am. Andy writes:

Whittingdale said it was "not completely" clear what would happen next. If the three do not reply, the committee will issue a formal summons. The hearing will then go ahead next Tuesday and either the three will appear or there will be "three empty chairs". Whittingdale said he really would hold a hearing with three empty chairs. If the witnesses did not appear, the committee would report that to the Commons as a whole as a contempt of parliament. But at that point it was not clear what would happen, Whittingdale said. The last time this happened was 50 years ago, when John Junor, the Sunday Express editor, was summoned to parliament. Junor obeyed. To find a precedent where someone refused to obey a summons, you have to go back much further. "We are almost into uncharted water," Whittingdale said. (My understanding is that, in theory, the Commons could order the serjeant-at-arms to go off and arrest the Murdochs or Brooks for a contempt of parliament. That is what used to happen in the 18th century, when the Commons also had the power to jail people for an offence of this kind. But apparently the lawyers accept that it would be impossible for parliament to do this now. For a start, it would never get past the Human Rights Act.)

Australia's government may review media laws in the wake of the phone hacking scandal at the News of the World, Julia Gillard said today. The Australian prime minister said:

To see some of the things that have been done to intrude on people's privacy, particularly in moments of grief and stress in the family lives, I've truly been disgusted to see it.

Here's my colleague Jason Deans's piece on the 60-year-old man arrested over phone hacking at the News of the World.

Detectives from Operation Weeting, the Metropolitan police investigation into mobile interceptions by News International, are understood to have raided an address in west London. The man was taken for questioning at a local police station on suspicion of conspiring to intercept communications, a Scotland Yard spokesman said. The suspect is the ninth arrest Scotland Yard has made since the fresh investigation into phone hacking was launched in January.

A Scotland Yard statement confirmed the arrest was carried out at 6.30am. "The man is currently in custody at a west London police station," the Met said. "It would be inappropriate to discuss any further details at this time."

Here's my colleague Hélène Mulholland's report on Nick Clegg's call for Rupert Murdoch and Rebekah Brooks to give evidence to the Commons media committee.

She has a good quote from the deputy prime minister:

Firstly we need to look at whether they have got the power and the ability to compel them. If someone cannot be compelled I don't know whether we can frogmarch them to the select committee. But if they have any shred of sense of responsibility or accountability for their position of power then they should come and explain themselves to the select committee.

Evan Harris, the former Lib Dem MP, said he expected Brooks to appear before the committee on Tuesday.

The New York Times is claiming that James Murdoch had argued that News Corp should press ahead with the BSkyB deal, but his father overruled him, "consulting him only after the decision was all but final".

The paper also speculates that News Corp might split off all its newspapers into a new company run by new management.

This is a move that Rupert Murdoch, 80, is certain to resist fiercely. Though Fox News has of late become the thrust of his political power in the United States, as well as a major source of revenue, his newspapers were the seedlings of his vast media enterprise. His emotional attachment to them runs deep, and they remain influential platforms not just in this country but in Britain. James Murdoch, 38, is said to share none of his father's romantic notions about newspapers.

The NYT also reports on the prospect of News Corp's facing a US inquiry.

Some legal experts cast doubt that the government would pursue a legal case against News Corporation. Ellen S Podgor, a law professor at the Stetson University College of Law and a regular contributor to a blog about the anticorruption act, said that initiating an investigation against the company "would be like entering a minefield". She said prosecutors would weigh the first amendment [free speech] issues involved and the fact that other statutes covered the conduct in Britain "where they allegedly occurred".

Sky and the BBC are both reporting that the man arrested today is Neil Wallis, former executive editor of the News of the World. More as we get it.

Over on his Politics blog, Andrew Sparrow assesses Nick Clegg's speech from this morning, which he calls "an exercise in liberal triumphalism".

Andy points out that Clegg's call for the Press Complaints Commission to be replaced with a system of "independent regulation" dovetails with David Cameron's preference for "independent regulation" over self-regulation or statutory regulation. The concept is still quite vague, although Clegg said the new press regulator should have the power to fine editors or journalists for breaking the code of conduct.

The deputy prime minister also suggested the law be changed so journalists and investigators could be jailed for "blagging" – obtaining personal information by deception.

My colleagues on the media desk have confirmed that the 60-year-old arrested over phone hacking this morning is ex-News of the World executive editor Neil Wallis.

Lord Prescott, the former deputy prime minister, Brian Paddick, the former senior Met police officer and Lib Dem candidate for mayor of London, and Chris Bryant MP, who are all applying for judicial review of the police over phone hacking, are to be joined by two new claimants, according to Bindmans solicitors. Ben Jackson and "HJK" are members of the public whose voicemails were hacked into on behalf of the News of the World, the law firm says. Neither were told by the police they were victims until the new investigation took charge earlier this year. The family of Milly Dowler and others will also give statements as interested parties in support of the judicial review. The claimants are asking the high court to order that the police failed in their legal duties by not warning people that they were victims, and for failing to conduct a proper investigation, the firm says.

Breaking: The Guardian understands that Neil Wallis has been arrested by Operation Elveden – the Met police's investigation into alleged payments by journalists to police – rather than Operation Weeting – the investigation into phone hacking.

11.51am correction: It was Operation Weeting, the phone hacking investigation, not Elveden, that arrested Wallis. Apologies.

Patrick Wintour, the Guardian's political editor, writes that cabinet secretary Sir Gus O'Donnell has denied claims he blocked an inquiry into phone hacking sought by the former prime minister Gordon Brown just before the May 2010 general election.

O'Donnell has now released his full advice to Brown setting out the options and sent to Brown's principal private secretary, Jeremy Heywood, on 19 March 2010.

In his first major speech in the House of Commons since he resigned as prime minister last year, Brown said on Wednesday, "I deeply regret my inability to do then what I wanted to do and to overturn the advice of all the authorities and set up a judicial inquiry."

O'Donnell said: "I gave advice based on the evidence that was available at the time. It was for the prime minister to decide what to do. I set out options. My advice is clear and was based on the evidence available at the time, and I would have taken the same decision now if I had the same evidence as I had then."

O'Donnell also pointed out to Brown that the inquiry being called so close to a general election in May 2011 there was no possibility that a judicial inquiry could produce a result in time.

In his document, marked restricted, O'Donnell set out the necessary steps to be taken before an inquiry was launched and whether in this case such an inquiry would be merited.

He wrote: "From the limited information available it is doubtful whether this case would merit holding an inquiry under the 2005 act. Any decision to hold such an inquiry could be challenged by judicial review particularly if the inquiry were extended to the media in general and it is not inconceivable that such a challenge might succeed."

He also stressed the immediate proximity to an election would inevitable raise questions over the motivation and urgency of such an inquiry.

Correction: It was Operation Weeting, the phone hacking investigation, not Operation Elveden, that arrested Neil Wallis, the News of the World's former executive editor. Apologies.

More from Patrick Wintour on Gus O'Donnell's advice to Gordon Brown. A Cabinet Office spokesman added: "This advice was requested by the prime minister. Decisions on whether or not to hold a public inquiry, and on its scope and nature, are always the decisions of a minister."

Rebekah Brooks will attend the media select committee, the BBC is reporting.

The BBC is reporting that the deputy serjeant at arms in the Commons will personally deliver a summons to Rupert Murdoch.

News International chief executive Rebekah Brooks has agreed to give evidence next week to the Commons culture, media and sport committee but a summons has been issued after Rupert Murdoch and his son James declined to attend the hearing, the Press Association reports.

To recap: News International chief executive Rebekah Brooks has agreed to give evidence to MPs over the phone hacking scandal next week, it was announced today.

But the Commons culture select committee has issued a summons to media mogul Rupert Murdoch and his son James after they said they were not available to attend the session. The younger Murdoch had offered to appear on 10 August instead.

It is not clear whether the committee will be able to compel the men to face questioning as they are US citizens.

Chairman John Whittingdale said: "We will expect them to respond to the summons." If they don't, "that is a matter that I would report to the House of Commons as a whole" and the Commons will decide how to proceed.

Asked if it mattered that the Murdochs were not British citizens, he said he would have to take legal advice.

"The summons, I hope, is being delivered as we speak," Whittingdale said.

In Brooks's letter to the committee, she says there may be some things she is prevented from discussing in detail, the BBC reports.

In Rupert Murdoch's letter, he says he is not willing to appear in front of the select committee, but would appear in front of the judge-led inquiry announced by the prime minister yesterday. That inquiry will be under oath.

Rupert Murdoch's letter to media committee chairman John Whittingdale, the News Corp chief says he is "fully prepared" to give evidence to the judge-led inquiry. Murdoch (left) writes:

I will be taking steps to notify those conducting the inquiry of my willingness to do so. Having done this, I would be happy to discuss with you how best to give evidence to your committee.

Some useful links for you:

• Dominic Carman on Lord Justice Leveson, who will head the inquiry into phone hacking and related unethical media practices.

• Madeleine Bunting says the phone-hacking scandal is an outrage of human decency.

• Rupert Murdoch is not the first press baron with a thirst for power, writes David McKie.

• And here's Patrick Wintour's story on Gus O'Donnell's denials that he blocked a phone hacking inquiry under Gordon Brown.

Here is the full statement from the culture committee.

The Commons Culture, Media and Sport Committee has this morning received letters from Rupert Murdoch, Chair and CEO of News Corporation, James Murdoch, Chairman and Chief Executive of News Corporation (International), and Rebekah Brooks, Chief Executive of News International, in response to its invitation to appear before the Committee. Rebekah Brooks has accepted the invitation to appear before the Committee next week. Rupert Murdoch has indicated he is unable to attend to give evidence, and James Murdoch has indicated he is unable to attend on the specified date but offered to appear at an alternative date, the earliest of which was August 10th. The letters are attached. The Committee has made clear its view that all three should appear to account for the behaviour of News International and for previous statements made to the Committee in Parliament, now acknowledged to be false. Accordingly, the Committee has this morning decided to summon Rupert Murdoch and James Murdoch to appear before the Select Committee in Parliament at 2.30pm on Tuesday 19 July 2011.

Here's what Rupert Murdoch said in his letter to the culture committee chairman, John Whittingdale.

Dear John, Thank you for your letter of 12 July, on behalf of the committee, inviting me to give evidence to you on 19 July. Unfortunately, I am not available to attend the session you have planned next Tuesday. However, I am fully prepared to give evidence to the forthcoming judge-led public inquiry and I will be taking steps to notify those conducting the inquiry of my willingness to do so. Having done this, I would be happy to discuss with you how best to give evidence to your committee. I hope this is of help. Yours sincerely, Rupert Murdoch

And here is the text of James Murdoch's letter to Whittingdale.

Dear John Thank you for your letter of 12 July, on behalf of the committee, inviting me to give evidence to you on 19 July. Unfortunately I am not available to attend the session you have planned next Tuesday. However, I would be pleased to give evidence to your committee on either the 10 or 11 August. Naturally, if neither of these proves suitable I would be willing to consider any alternative dates you suggest. I hope this is of help to the committee. Yours sincerely, James Murdoch

And here is the full text of Rebekah Brooks's letter to Whittingdale.

Dear John, Thank you for your letter of 12 July, on behalf of the committee, inviting me to give evidence to you on 19 July. I am writing to confirm that I am available to appear before the committee on that date and welcome the opportunity to do so. As you are well aware, the Metropolitan police investigation into illegal voicemail interception continues and we are fully cooperating with that. Aspects of the work to which your committee may wish to refer are likely to be relevant to that investigation. Indeed, the police have already asked us specifically to provide information about those matters. I understand that various select committees have approached the police over time in relation to this and other cases. The police's position has been to co-operate where this did not directly impact on the investigation in question. In those cases where it did potentially impact, the police have historically declined to comment at that stage. Our understanding is that this approach has not been challenged. Given that we are in the midst of an investigation, and we do not want to prejudice it, I hope you will understand why we feel it would not be appropriate to respond to such questions at present in order to be consistent with [the] police's approach, and that as a result this may prevent me from discussing these matters in detail. I hope this is of help, and look forward to hearing from you to discuss exact timings and other details. Yours sincerely, Rebekah Brooks

My colleague Marina Hyde tweets:

Outside Organisation website 9am Neil Wallis "Managing director". Outside Organisation website 11.30am Neil Wallis "Freelance consultant".

The family of Jean-Charles de Menezes (left), the man killed by police on the tube after being mistaken for a suicide bomber in 2005, are saying that details about the phone number of his cousin Alex Pereira were found in documents seized from Glenn Mulcaire, the private investigator jailed for phone hacking in 2007.

Here's Hélène Mulholland's report on Rebekah Brooks's decision to attend the Commons culture, media and sport committee on Tuesday.

Yasmin Khan, a spokeswoman for the Justice4Jean campaign, told the Guardian's Sam Jones that they had recently discovered that Glenn Mulcaire's list included the phone number of Jean-Charles's cousin, Alex Pereira:

We were told yesterday. We approached police last week and they got back to us yesterday with Alex's number and told us to submit the numbers of family members and members of the campaign.

Sam will have more shortly.

Here's the letter from the Menezes family to David Cameron and ccd to Nick Clegg, Ed Miliband, and Keith Vaz, the chairman of the home affairs select committee. The letter calls upon the PM to extend the remit to the inquiry into the phone hacking scandal to scrutinise whether police officers involved in the Menezes investigation were leaking information to the press, either for financial benefit or in an effort to defend the reputation of the Metropolitan police.

In the letter, the family say the telephone number of a member of the Menezes family was found on the phone hacking list of the private investigator Glenn Mulcaire. The family's legal team have now submitted the names and telephone numbers of others who may have been potential targets of illegal phone hacking by Mulcaire on behalf of News of the World, including other relatives of Jean Charles de Menezes, representatives from the Justice4Jean campaign and members of their legal team.

The family say they have a "deep concern" about the relationship between Andy Hayman, the now-retired police officer in charge of the first phone hacking inquiry, and News International. Since leaving the police, Hayman has written for the Times, which is owned by NI.

The Menezes family point to the significant number of leaks relating to the Menezes case that appear to come from police sources and call on Cameron to do everything within his power to ensure that this issue is thoroughly investigated.

A spokesperson for Justice4Jean said:

The Menezes family are deeply pained and to find their phones may have been hacked at a time at which they were at their most vulnerable and bereaved. They are bewildered as to why the police did not approach them with this information earlier, and fear the police may be attempting to cover up their own wrongdoing once more relating to this case.

Here is the text of their letter:

Dear Mr Cameron, Re: News International phone hacking and relationship with the police We are writing to you to express our deep concern about reports exposing the relationship between Andy Hayman and News International and how this may relate to the media coverage and investigation into the death of our cousin, Jean Charles de Menezes, after his death on 22 July 2005. Our lawyers have contacted officers involved in Operation Weeting who confirmed yesterday that the phone number of Alex Pereira, one of Jean Charles's cousins, was found on the phone hacking list of the private investigator Glen Mulcaire. Our legal team have now submitted the names and telephone numbers of others who may have been potential targets of illegal phone hacking by Mulcaire on behalf of News of the World, including other relatives, representatives from the Justice4Jean campaign and members of the legal team. We are currently awaiting information from the police to confirm whether any of these numbers appear on the list and whether there is evidence that their voicemail messages were hacked. Should this be the case, it would present an egregious and unwarranted intrusion of privacy into the lives of our grieving family and a deliberate attempt to curtail our fundamental right to seek redress for the unlawful killing of our cousin. With the sixth anniversary of Jean's death approaching next week, we write to urge you to do everything within your power to ensure the police swiftly investigate this sensitive matter and report back to our legal team as quickly as possible. We would also like to draw your attention to another aspect of the investigation of our cousin's death, which we believe warrants further attention. In the Independent Police Complaints Commission's 'Stockwell 2' investigation, the practice of police 'off the record briefings' to the media was scrutinised and the IPCC found that Andy Hayman had deliberately 'misled the public' over claims that person who had been shot dead by the police on 22 July 2005 was one of the four men who were being sought in connection with the attempted bombings of the previous day. Recent coverage of the police's role in investigating allegations of phone hacking, including Mr Hayman's evidence to the Home Affairs Select Committee, have highlighted his close relationship with News International, including potential financial links. We are conscious that the newspapers owned by News International provided some of the most virulent and often misleading coverage around Jean's death and its aftermath. Throughout the investigation, misinformation continued to be leaked to the press that attempted to besmirch Jean's character. The publication of these lies about his actions on the day of the shooting included false allegations that Jean Charles was wearing a bulky jacket, had failed to stop after a police warning, had jumped the ticket barriers or had acted suspiciously in the moments leading up to his shooting. They also related to untrue allegations about his immigration status and even attempts to link him to a rape allegation that could only have emanated from police sources. There was also a conscious attempt to smear the Justice4Jean campaign by attacking individuals involved in supporting the Menezes family. Considering what is now known about Andy Hayman's relationship with News International, we would like the inquiry into this scandal to extend its remit to scrutinise whether police officers involved in the Menezes investigation were leaking information to the press, either for financial benefit or in a vain effort to deflect criticism from the actions of the Metropolitan Police which had led to Jeans death. These issues are of extreme importance to our family, whilst the accountability of the police and how politically sensitive criminal investigations are reported in the media are clearly a matter of public interest. We hope you will take these issues forward on our behalf. Yours sincerely Patricia da Silva Armani, cousin of Jean Charles de Menezes

Vivian Figueiredo, cousin of Jean Charles de Menezes

Alessandro Pereira, cousin of Jean Charles de Menezes Cc – Rt Hon Ed Miliband MP, Rt Hon Nick Clegg MP, Rt Hon, Keith Vaz MP

Here is a lunchtime summary after another dramatic morning in the phone hacking affair.

• Rebekah Brooks, News International's chief executive, will appear before the Commons culture, media and sport committee on Tuesday to answer to discuss the phone hacking affair, although she says there are some things she will not be able to discuss in detail because of the ongoing police investigation. Rupert Murdoch, the head of News Corporation, NI's parent company, and his son James, News Corp's chairman, were also asked to appear. Rupert said he could not, and James said he could, but on 10 or 11 August. The committee has now sent them summonses to appear. It is unclear what will happen if they refuse these summonses (see 12.22pm). Nick Clegg, the deputy prime minister, has called on them all to appear (see 10.26am).

• Rupert Murdoch did say that he would be happy to appear before the judge-led public inquiry into the press announced by David Cameron yesterday (see 12.22pm).

• Neil Wallis, a former executive editor of the News of the World, has been arrested over phone-hacking at the News of the World (see 11.16am).

• The family of Jean-Charles de Menezes, the man killed by police on the tube in London after being mistaken for a suicide bomber in 2005, say one of their telephone numbers was found on the phone hacking list of private investigator Glenn Mulcaire, who was jailed for hacking in 2007 (see 1pm).

• Gus O'Donnell, the cabinet secretary, has released his advice to Gordon Brown from 2010 setting out the options for a judicial inquiry. O'Donnell was keen to emphasise that decisions on taking public inquiries are taken by ministers, not civil servants (see 11.52am).

• Nick Clegg has suggested replacing the Press Complaints Commission with a system of "independent regulation"; a new body would have the power to fine editors and journalists for breaking its code of conduct (see 11.13am).

The Twitter rumour mill suggests that Met Assistant Commissioner John Yates may have tendered his resignation to the Metropolitan Police Authority. Channel 4 News's Cathy Newman tweets:

Met now insisting John Yates isn't resigning - 'currently' or otherwise

The Met's press bureau have just told the Guardian they're not making any comment at all on the rumours.

Sky's Martin Brunt has been speaking to his sources about the Yates resignation rumours - they dismiss the speculation as "malicious mischief"

Ulrika Jonsson has entered the phone-hacking saga, telling ITV1's Tonight programme that an editorial executive at The News of the World warned her about phone hacking — as did the Met. In the programme, which is broadcast tonight, Jonsson says:

I was contacted by the Met Police on my mobile phone and they left me a number and said please call me back we have some very important evidence we want to show you. There were pin codes, numbers for my automatic front gate where I lived and the feeling that, according to these notes, that I was definitely being watched. Immediately my head started pounding. I felt … I really felt very sick. I felt immediately like my stomach was turning. I felt really scared - somebody's been watching or certainly somebody's been listening to my life.

Jonsson — who, it's worth noting, was a News of the World columnist for four years — also ponders the paper's passing:

I would say that The News of the World did an awful lot of good. Unfortunately, underneath all that was a very, very dark side – but I think it's very clear it was not just The News of the World where this took place.

The full programme, Rupert Murdoch, the power and the story is on ITV1 at 7.30pm

Here's a handy, up-to-date timeline of the arrests made in the course of Operation Weeting and Operation Elveden

My colleagues Rupert Neate and Mark Sweney bring news that News Corporation has called in PR and lobbying specialists Edelman to help it handle mounting public anger and political pressure over the phone-hacking scandal.

They add:

The PR company will report directly to Will Lewis, general manager of News Corp subsidiary News International, the publisher of Murdoch's British newspapers. The appointment of Edelman comes after 11 days of sustained coverage of the phone-hacking scandal, which has forced News International to close the News of the World and News Corp to abandon its BSkyB takeover.

Interesting development, this, courtesy of PA:

The Hacked Off campaign is consulting its lawyers over whether some witnesses called before the inquiry should be granted immunity from prosecution to speed up proceedings. It will submit a recommendation to inquiry judge Lord Justice Leveson.

Former Lib Dem MP Evan Harris, a member of the group, said:

Some people feel that anyone who has been involved in wrongdoing should face a criminal trial and other people are very keen that the truth comes out as quickly as possible, even if that means giving immunity to the people who admit to wrongdoing.

Here's a news story from Sam Jones and Vikram Dodd on today's Jean-Charles de Menezes developments. The sixth anniversary of De Menezes' death falls next week.

Andy Sparrow has just blogged about the summonses issued by the culture committee and what action the Murdochs could face for failing to turn up:

At business questions Sir George Young, the leader of the Commons, was asked what would happen if Rupert Murdoch and his son James refused to respond to the summonses that have been issued today by the culture committee. Here's how he replied.

A select committee can make a report to the House if it's believed a contempt has been committed. It is then a matter for you, Mr Speaker, to decide whether that should have precedence and it then gets referred to the committee on standards and privileges to take the matter further. A range of sanctions are available to the House for contempt. One includes you, Mr Speaker, admonishing somebody who appears at the bar, a responsibility I know you would discharge with aplomb. There are a range of other penalties including fines and imprisonment, but that has not been used for some time.

More from our legal affairs correspondent, Owen Bowcott, on the sanctions available to the select committee (note the use of the word desuetude):

The legal powers to compel anyone against their will to answer questions at a parliamentary select committee may have fallen into disuse and may no longer be enforceable, a leading constitutional expert has suggested. Trying to enforce such infrequently exercised regulations against a foreign national — in this case the Murdochs — is even less likely to be successful, according to Vernon Bogdanor, the former professor of government at Oxford University.

He said:

My understanding is that as they are not British citizens no sanctions could be used against them. A British national could, in theory, be fined or imprisoned [if they defied the summons]. The authority would be in the standing orders of parliament but my hunch is that it has fallen into desuetude [disuse].

Eliot Spitzer, the former governor of New York, who resigned over reports that he was a client of prostitution ring, claims at Slate that it is "unlikely" News Corporation's "shoddy ethics were limited to Great Britain". Furthermore, he argues that US law may have been broken on the facts we know already. He refers specifically to the Foreign Corrupt Practices Act, which bars American companies from paying bribes abroad.

So acts in Britain by British citizens working on behalf of News Corp. create liability for News Corp., an American business incorporated in Delaware and listed on American financial exchanges.

Spitzer, who notes that News Corp's behaviour has shocked even "cynical British journalists", adds:

The other reason to investigate here is that there is serious doubt that this matter can be investigated properly in Great Britain. Scotland Yard is already implicated, as is [David] Cameron's government. DoJ [the US department of justice] can and should fill the void.

Ian Burrell, the Independent's media editor, tweets that the Sun on Sunday will be launched "within a month, I'm told". I'm sure he knows much more about it than I do, but I would be very surprised if News International wanted to undo any improvement to their reputation they secured by scrapping the News of the World by launching what would in many ways be a like-for-like replacement so soon.

Owen Bowcott, the Guardian's legal affairs correspondent, sends more on the sanctions to compel attendance at a parliamentary select committee. Earlier, Owen reported that constitutional expert Vernon Bogdanor said that such sanctions might now have fallen into disuse and be no longer enforceable. Bogdanor reckoned trying to enforce them against a foreign national would be even less likely to succeed. Here's Bogdanor's full quote:

My understanding is that as they [the Murdochs] are not British citizens no sanctions could be used against them. They could leave the country. A British national could, in theory, be fined or imprisoned [if they defied the summons]. The authority would be in the standing orders of parliament but my hunch is that [the sanctions to enforce it have] fallen into desuetude [disuse].

Owen says that select committee experts agree that the powers to enforce attendance have been allowed to decay. A crucial passage in a report by the Commons standards and privileges committee on phone hacking last year specifically investigated the issue, and concluded: "We suggest that the power to reprimand an offender in person at the bar of the house, though not used in recent times, should continue to be available. We recommend that measures to implement the recommendations of the joint committee that the house should lose its powers of imprisonment and should be given a statutory power to fine offenders be included in the draft privileges bill." Owen writes:

Erskine May, the handbook of parliamentary convention, is the relevant authority, a select committee official maintained. "If someone is in the UK's jurisdiction, they can be summoned," she said. "It means the summons can be delivered in person." Nationality is not relevant, she added. The House of Commons is not believed to have fined anybody since 1666 and has not "committed anyone to custody", apart from temporarily detaining them, since the 19th century. The last time the Commons attempt to reprimand anyone at the bar of the house was in 1957 when the Sunday Express editor John Junor was criticised after offending MPs by publishing an editorial accusing them of abusing their petrol allowances. "Such a sanction would now appear high-handed," the recent standard and privileges committee report acknowleged. In his evidence to the committee, Lord Nicholls warned the Commons that it lacked the necessary powers to deal with offenders. He said: "I find it very difficult to see how the house has any effective remedy here and I do wonder, going through with a full and thorough investigation, where it can lead. You can rap the editor of a newspaper over the knuckles and admonish him, which will not give him the loss of a wink's sleep, but there is nothing else, as I understand it, that, effectively, you can do."

The relevant passages of Erskine May are:

When a committee decides to summon a witness formally, the witness is summoned to attend the committee by an order signed by the chair. Failure to attend a committee when formally summoned is a contempt and if a witness fails to appear, when summoned in this manner, his conduct is reported to the house … Foreign or Commonwealth nationals are often invited to attend to give evidence before committees ... There is no record of foreign or Commonwealth nationals resident (temporarily or permanently) in the United Kingdom being formally summoned, but on the analogy of the process in courts of law, there would appear to be no bar to their being summoned if they are present within the jurisdiction of parliament.

The situation could be further complicated for James Murdoch, who was born in London. The Financial Times is claiming he is a joint UK/US citizen, which could make him more vulnerable to the committee's summons. I'll try to clarify this.

Sir Paul Stephenson, the commissioner of the Metropolitan police, said his integrity was "completely intact" today as he defended his decision in 2006 to dine with Neil Wallis. Wallis, then deputy editor of the News of the World, was arrested today as part of the police's phone hacking inquiry.

I just spoke to News International and they confirmed that James Murdoch is a dual UK/US citizen.

The News of the World scandal and its effect on the Murdoch empire makes the cover of Time magazine in the US this week, with a mock-up of the NoW whose layout and design are slightly too neat, calm and tasteful to be convincing. Time's story has the almost-good headline: "Tabloid bites man."

At Forbes, Jeff Bercovici looks back at previous Time covers featuring Murdoch.

Sky News is reporting that former News of the World executive editor Neil Wallis, who was arrested in the phone hacking inquiry today, was employed by the Metropolitan police as a consultant last year. We can't confirm that right now.

David Cameron thinks Rupert and James Murdoch should appear before the Commons culture, media and sport committee next week, his spokeswoman has said.

Asked whether the prime minister was disappointed that the Murdochs did not plan to attend next week's hearing, a spokeswoman said:

He's made his views clear on this - he thinks they should appear, but clearly that's a matter for the committee.

Scotland Yard have admitted they employed Neil Wallis, the former executive at the News of the World who was arrested today in the phone hacking inquiry, as an adviser to the commissioner until September of last year, Vikram Dodd, our crime correspondent, reports.

Wallis was employed to advise Sir Paul Stephenson and John Yates on a part-time basis from October 2009 to September 2010. During this time Scotland Yard said there was no need to reopen the phone hacking investigation, a decision made by Yates, despite allegations in the Guardian that the first police investigation into the scandal had been inadequate. Wallis joined the News of the World from in 2003 as deputy to then editor Andy Coulson. In mid-2007 he became executive editor and left the News International title in 2009. Police say he supplied "strategic communications advice", and the Met said his company was chosen because it offered to do the work for the lowest price. Relations between senior Met officers and the News of the World senior executives have been under scrutiny recently. In September 2006, the then deputy commissioner, Paul Stephenson, accompanied by the Yard's head PR man, Dick Fedorcio, dined with Wallis, then the News of the World's deputy editor. This was only a month after Yard officers had arrested the paper's royal correspondent, Clive Goodman, and at a time when detectives were still attempting to investigate whether other journalists or executives were involved in the interception of voicemail messages. In theory, Mr Wallis was a potential suspect in the inquiry. In a statement Scotland Yard said: "Chamy Media, owned by Neil Wallis, former Executive Editor of the News of the World, was appointed to provide strategic communication advice and support to the MPS, including advice on speech writing and PR activity, while the Met's

Deputy Director of Public Affairs was on extended sick leave recovering from a serious illness. "In line with MPS/MPA procurement procedures, three relevant companies were invited to provide costings for this service on the basis of two days per month. Chamy Media were appointed as they were significantly cheaper than the others. The contract ran from October 2009 until September 2010, when it was terminated by mutual consent. "The commissioner has made the chair of the police authority aware of this contract."

There are reports Rupert and James Murdoch are now considering attending the committee on Tuesday.

Rupert Murdoch and his son James have indicated that they will give evidence to the Commons Culture, Media and Sport Committee on Tuesday, a News Corporation spokesperson told the Press Association.

So after all the media committee will get to interview Rupert Murdoch. When John Whittingdale, the chairman, was asked whether he would call Murdoch a few days ago, he seemed to laugh involuntarily – presumably at the idea of such a huge figure appearing before him. Now it seems it will happen. Tuesday's will be quite a riveting session.

How should the British press be regulated? Nick Clegg has called for a shakeup of press regulation in the wake of the phone-hacking scandal, but what's the best way for newspapers to be policed, asks Lisa O'Carroll.

Here is an evening summary after another dramatic day in the phone hacking affair.

• Neil Wallis, the former News of the World executive editor who was arrested today in the phone hacking inquiry, was employed to advise Sir Paul Stephenson, the commissioner of the Metropolitan police and senior officer John Yates from October 2009 to September 2010 (see 4.32pm). During this time Scotland Yard said there was no need to reopen the phone hacking investigation, a decision made by Yates, despite allegations in the Guardian that the first police investigation into the scandal had been inadequate.

• Rupert Murdoch, James Murdoch and Rebekah Brooks will all appear before the Commons culture, media and sport committee on Tuesday. The Murdochs originally refused to appear, but pressure appears to have forced them to reconsider (see 4.45pm).

• Rupert Murdoch also that he would be happy to appear before the judge-led public inquiry into the press announced by David Cameron yesterday (see 12.22pm).

• The family of Jean-Charles de Menezes, the man killed by police on the tube in London after being mistaken for a suicide bomber in 2005, say one of their telephone numbers was found on the phone hacking list of private investigator Glenn Mulcaire, who was jailed for hacking in 2007 (see 1pm).

• Gus O'Donnell, the cabinet secretary, has released his advice to Gordon Brown from 2010 setting out the options for a judicial inquiry. O'Donnell was keen to emphasise that decisions on taking public inquiries are taken by ministers, not civil servants (see 11.52am).

• Nick Clegg has suggested replacing the Press Complaints Commission with a system of "independent regulation"; a new body would have the power to fine editors and journalists for breaking its code of conduct (see 11.13am).

This is David Batty - I'm taking over the live blog for the rest of the evening.

Business secretary Vince Cable says the rules regarding what constitutes a fit and proper owner for broadcasting firms "may need to be revisited" in light of the phone hacking scandal.

He told the BBC Radio 4 PM programme: "It is a little bit like the end of a dictatorship when everybody suddenly discovers they were against the dictator."

Cable was stripped of his powers on media regulation after he told undercover reporters he had "declared war" on Rupert Murdoch in December last year.

Here's the Guardian's full account of Rupert and James Murdochs' decision to join Rebekah Brooks in being questioned by MPs on the Commons culture select committee next Tuesday.

Meanwhile Keith Vaz, chairman of the home affairs select committee, said new Commons select committee hearings were required because the Met Police's failed to adequately investigate the original complaints of phone hacking.

"This could have been done years ago, and we could have had an answer to this problem way back in 2006," he told Sky News.

Amid the biggest legal crisis in News Corp's history, the company's legal team is beset by staff problems, Reuters reports.



With worldwide corporate general counsel Lawrence Jacobs resigning last month and Tom Crone, legal manager and senior executive of News International, leaving the company yesterday, the corporation's legal team is said to be in "disarray".

The search for Jacobs' replacement could take longer than usual with candidates put off by the scale of the legal problems News Corp is likely to face of the coming months, the report adds.

Met commissioner Paul Stephenson has been summoned to attend the home affairs committee on Tuesday, a source told the Guardian.

Home secretary Theresa May has written to Met Police commissioner Sir Paul Stephenson to get "the full picture" regarding Neil Wallis, a Home Office spokesman said.

Wallis, the former News of the World executive editor who was arrested today in the phone hacking inquiry, was employed to advise Stephenson and assistant commissioner John Yates from October 2009 to September 2010.

There's an interesting comment on Twitter from MP Chris Bryant regarding the arrest today of Neil Wallis:

"I had issued an FOI request to teh [sic] Met an hour ago on Wallis being paid by Met - is that why it's out now?"

London mayor Boris Johnson was "furious" to learn today that Scotland Yard hired former News of the World deputy editor Neil Wallis as a consultant, says Sky News crime correspondent Martin Brunt.

News International is planning to book advertising space for a full page apology in a range of national newspapers, including the Guardian, over the weekend in a bid to draw a line under the phone-hacking scandal, according to our latest report on the crisis facing the Murdoch empire.

News International is in last-minute discussions with rival publishers of titles including the Independent, the Daily Telegraph, the Daily Mail and the Guardian – as well as their Sunday counterparts – and possibly the Daily Express about running a full page apology ad.

The company has also been sounding out advertiser reaction to launching the Sun on Sunday on 7 August, the weekend before the start of the Premier League season, when the now defunct News of the World traditionally put out a bumper issue.

PA has published a list of the members of the Commons culture media and sport committee who will grill Rupert and James Murdoch and Rebekah Brooks at next Tuesday's hearing:

• Chairman John Whittingdale is a senior backbench Conservative. He quit his job in the City to work as an adviser to Margaret Thatcher in the 1980s. • Tom Watson, Labour, took the Sun to court and won after it ran stories claiming he had been involved in a campaign to smear the Tories. • Louise Mensch, Conservative, a "chick-lit" novelist, claims she has been "threatened" before by a national newspaper journalist. • Philip Davies, Conservative, is a rebellious backbencher who is outspoken on crime and immigration. • Therese Coffey, Conservative, was finance director for Mars Drinks UK before being elected last year. • Damian Collins, Conservative, worked at Saatchi advertising before setting up his own marketing firm. • Paul Farrelly, Labour, admitted last year he "wrestled" a man to the floor in a Commons bar "entirely in self-defence". • Alan Keen, Labour Co-operative, is chairman of the All Party parliamentary football group and once worked as a tactical scout for Middlesbrough football club. • Adrian Sanders, Liberal Democrat, is a keen campaigner on animal welfare issues. • Jim Sheridan, Labour, a former trade union convener and chairman of the All Party parliamentary Scottish football group.

Here's a copy (pdf) of the letter James Murdoch sent to the Commons culture, media and sport Committee in response to the summons served on both him and his father earlier today, which confirms they will both attend.

Here is the full text of the letter to the committee's chairman, John Whittingdale:

Dear Mr Whittingdale, I refer to the Culture, Media and Sport Select Committee's request that my father and I attend the oral session on Tuesday 19 July at 2.30pm. I am writing to confirm our attendance. I would like however to draw your attention to a few issues. I hope that it is clear that we are committed to ensuring that the issues that have affected the News of World are fully investigated and dealt with appropriately and robustly. To that end we have committed to full co-operation with the police inquiries that are under way and with the public inquiry to be led by Lord Justice Leveson that will begin its work shortly. We, of course, also wish to co-operate fully with your Committee's consideration of these matters. In the course of the investigations and inquiries now envisaged, all the relevant issues will undoubtedly be fully and effectively reviewed and, no doubt, many questions will be asked. I am, however, very much concerned that we are now being asked to answer yet further questions in a different forum. We have been advised that, in light of the fact that there are to be multiple reviews of the issues, this does carry the risk of prejudicing other judicial proceedings and in particular the ongoing police investigation and any potential subsequent prosecutions. I would therefore respectfully ask you to take the utmost care in ensuring that the committee hearing does not run any risk of prejudicing that investigation and subsequent prosecutions. I look forward to hearing from you as soon as possible. Yours sincerely James Murdoch

Interviewer Martin Bashir has suggested that he might have been targeted by News International's subversive journalistic tactics as far back as 1996.

The MSNBC host, best known for her interview with Princess Diana, told NBC Today that two Sun journalists had tried to get into the intensive care area where his wife was resting after the birth of their third child.

After I interviewed Princess Diana in 1995, we had our third child in '96, Eliza, and she was incubated after birth because she was – she had problems with her lungs. Within two day, two journalists attempted to get into the ward, both of them working for The Sun newspaper. How did they know, when nobody else knew, that our daughter, who was just two days old, was unwell?

The FBI has opened an investigation into allegations that News of the World journalists tried to hack into the phones of 9/11 victims, AP reports.

The FBI's investigation will focus on allegations against Murdoch's British papers, as there is no suggestion that his US titles were involved, Sky News reports.

We'll have more details soon.

Channel 4 News says that the Met Police have been debating for some time when to reveal that a former deputy editor of the News of the World was advising them about media relations.

The programme's home affairs correspondent Andy Davies tweets: "I'm told the Met have been holding internal discussions for a few weeks over how/when to go public on the Neil Wallis contract."

I wonder if it was Wallis who formulated that bit of media strategy?

Boris Johnson had "a very frank discussion" with the Metropolitan police commissioner lasting nearly an hour and a half following the revelation about Wallis.

A spokesman for the London mayor said:

Sir Paul Stephenson reassured the Mayor that the investigation at Scotland Yard is proceeding as swiftly and thoroughly as possible. He explained the circumstances of the hiring on a part-time, short-term basis of Neil Wallis.

PA reports that the two men agreed the matter should be referred to the judge-led phone hacking inquiry ordered by David Cameron, "not least because the public needs to be reassured that this was not inappropriate".

At a meeting of the Metropolitan Police Authority earlier, Sir Paul was forced to defend his decision to to dine with Wallis in 2006, when he was still working for the News of the World.

"I do not believe that on any occasion I have acted inappropriately. I am very satisfied with my own integrity," he said.

More details now on the FBI's decision to investigate allegations that 9/11 victims had their phones hacked by journalists from the News of the World.

The investigation was opened after US Congressman Peter King wrote to FBI director Robert Mueller, according to a law enforcement official. The FBI had also received letters from other members of Congress.

The New York Times has more detail on the status of the investigation:

The investigation is in its earliest stages, one of the people said, and its scope was not yet clear. It also was unclear whether the F.B.I. had identified possible targets of the investigation or possible specific criminal violations. The investigation was expected to be handled jointly by two F.B.I. squads in the bureau's New York office, one that investigates cybercrimes and another that focuses on public corruption and white collar crimes, one of the people said. They all spoke on the condition of anonymity because they were not authorized to discuss the case. It was not immediately clear whether federal prosecutors in Manhattan were involved in the case; they would most likely have jurisdiction over any prosecution because the 9/11 victims and their cellphones would have been in Manhattan when they died.

Martin Rowson's cartoon for tomorrow's Guardian cuts to the chase regarding MPs' new found confidence to stand up to the Murdoch empire.

A flamed-haired and furious Rebekah Brooks, standing atop a pile of soiled tabloids, demands of the Commons culture, media and sport committee: "And when did you last grow your balls back?"

The Guardian's New York correspondent has more on the FBI's decision to open an investigation into allegations that News International journalists tried to hack the phones of 9/11 victims.

Jim McCaffrey, a New York firefighter who lost his brother-in-law Orio Palmer, also a firefighter, on 9/11, welcomed the FBI inquiry. "If these claims are found to be true I think it's a terrible revelation and very, very upsetting to 9/11 family members," he said.

The Wall St Journal online has an interview with Rupert Murdoch – his first major public statement since the Milly Dowler hacking was revealed last week.

Mr. Murdoch said the damage to the company is "nothing that will not be recovered. We have a reputation of great good works in this country." Mr. Murdoch said News Corp. has handled the crisis "extremely well in every way possible," making just "minor mistakes." He rejected criticism that James Murdoch had acted too slowly in dealing with the tabloid scandal. "I think he acted as fast as he could, the moment he could," Mr. Murdoch said. The elder Mr. Murdoch said that he, too, had acted appropriately and quickly, saying, "when I hear something going wrong, I insist on it being put right." People close to the company have said the company has considered a separation or sale of its newspaper assets. Mr. Murdoch called such reports "pure rubbish. Pure and total rubbish....give it the strongest possible denial you can give." Mr. Murdoch, who agreed on Thursday to appear before a parliamentary committee next week after, said he wanted to address "some of the things that have been said in Parliament, some of which are total lies." Mr. Murdoch singled out former British Prime Minster Gordon Brown. "He got it entirely wrong," Mr. Murdoch said, adding that "the Browns were always friends of ours" until the company's Sun tabloid withdrew its support for the Labour Party before the last election.

Murdoch also said News Corp would set up an independent committee to "investigate every charge of improper conduct", which would be led by a "distinguished non-employee". He added it would also put together a "protocol for behaviour" for new reporters across the company.

The front pages of several of tomorrow's papers are again dominated by latest developments in the hacking scandal.

The Guardian's lead story focuses on the arrest of Neil Wallis and the revelation that the former News of the World deputy editor was hired by Scotland Yard.

The Telegraph leads on the same story under the headline "The Met commissioner and the Wolfman of Fleet Street".

"Murdoch hit by FBI 9/11 hacking inquiry" is the headline of the lead story in the Independent, which notes the danger this poses to his US interests.

The Financial Times has also has a report about the FBI probe on its front page, although it is not the lead story.

The Daily Star also leads on the scandal but chooses to focus on the plight of Ulrika Jonsson who tells the tabloid of "her horror after police found her name on a phone hacker's hitlist."

Carlene Thomas-Bailey in New York has this report on today's protest outside Rupert Murdoch's home:

Outside Rupert Murdoch's luxury apartment, by the corner of Central Park, protesters gathered at midday to campaign against the man at the centre of the phone-hacking scandal. Organisers from the African-American civil rights organisation Color of Change led a protest against Murdoch, arguing for a congressional investigation into the media mogul and his media corporation. Approximately 40 people and a media scrum were camped across the street from Murdoch's home, as neighbours poked their heads out of the window to see what was going on. Lead organiser Rashad Robinson said he was campaigning to see "an honest pursuit of the truth, looking at what Murdoch has done to raise his profits, because Murdoch always puts profits over the American people, whether it's the phone hacking or race baiting." Referring to claims of recent racial stereotyping on the Fox network by Eric Bolling, and the phone hacking allegations, Robinson said that while Fox News chief Roger Ailes might have ignored the petitions that were sent to him, he would be unable to ignore this protest. The protesters, male and female, of different ages and races, waved placards that read "Investigating 9-11 victim spying stopfox" and "You out-foxed yourself, Murdoch". One particularly vocal protester shouted: "Rupert Murdoch is a scandal. Down with Fox". Organisers handed out leaflets with the phone numbers of all the organisations that advertise with Fox, to get people to call and pull their advertising. Two policeman were there to oversee that protests did not get out of hand. Just after 12.30pm, Robinson made an announcement to the crowd, saying: "The recent news that has elevated the story of the wire tapping in Europe and particularly here in America shows that Americans have had enough, that folks are finally willing to stand up to Rupert Murdoch." At this point the crowd burst into applause. "They [Americans] are realising that if this man is willing to make money by tapping people's phone, what else will he do?" After his speech, Robinson carried more than 110,000 petitions against Murdoch and led the protesters across the street, where he planned to leave them at Murdoch's front door. He was denied access to the building and stood outside, commenting that this was just another way that Murdoch was closing his ears to the American public, but that after today he will continue to campaign and speak out against Murdoch and Fox News. He called for others to do the same.

Eliot Spitzer, the former New York governor who is now a political commentator, has claimed Murdoch's empire is falling apart, and says News Corporation should be investigated by the US department of justice over allegations of "bribery, illegal wiretapping, interference in a murder investigation, political blackmail, and rampant disregard for both the truth and basic decency".

Spitzer, a lawyer by trade, writes that News Corporation could potentially be in breach of the Foreign Corrupt Practices Act, which "prohibits any American company or citizen from paying or offering to pay—directly or indirectly—a foreign official, foreign political figure, or candidate for the purpose of influencing that person in any decision relating to his official duties, including inducing that person to act in violation of his or her lawful duty". And the salient point, Spitzer argues, is that even if such acts occur overseas, the American company or citizen will be held liable in the US.

Full details of Spitzer's Slate article here.

Tomorrow's Mirror's headline: 'Murdoch, the cops and the Wolfman'. The Wolfman is Neil Wallis, not Lon Chaney Jr.

Time to wrap up this evening's live blog, but here's a summary of today's phone-hacking developments.

• The FBI is to investigate allegations that News of the World journalists attempted to hack into the phones of 9/11 victims. The Mirror reported that an unnamed former New York police officer – working as a private detective – was said to have been approached by News of the World reporters asking him to retrieve the private phone records of the dead. The detective was reported to have declined to take up the commission. News Corp declined to comment on the allegations.

• Rupert Murdoch has criticised Gordon Brown and accused MPs of lying in a fierce defence of News Corporation's handling of the phone-hacking scandal. In his first interview since details of hacking emerged, Murdoch said some British MPs' comments on the scandal were "total lies" and said Brown had "got it entirely wrong" when he alleged that Murdoch's British papers had used "known criminals" to get access to his personal information when Labour was in government.

• Murdoch and his son James bowed to pressure and agreed to appear before a Commons committee investigating why News International executives provided false information to MPs. The culture committee issued a summons for the Murdochs after they missed a 9.30am deadline to say whether they would attend. The pair will appear alongside News International chief executive Rebecca Brooks.

• Neil Wallis, a former executive editor of the News of the World, arrested today by a police team investigating phone hacking, had been employed as an adviser to Scotland Yard's top officers last year. The Met said it had employed him as a part-time adviser on "strategic communications".

• Detectives have told a cousin of Jean Charles de Menezes that his number was found among documents belonging to the News of the World private investigator at the centre of the phone-hacking scandal.

Thanks for reading. Goodnight.