Here are today's key developments in the phone-hacking saga so far today.

• BSkyB has reported pre-tax profits of £1bn in the year to the end of June, as the company announced a £750m share buy-back to appease investors unhappy after the failure of News Corporation's bid to takeover the satellite broadcaster.

• James Murdoch received a ringing endorsement from BSkyB directors yesterday. The satellite group's board meeting ended with support for Rupert Murdoch's youngest son to continue as chairman, after the collapse of the family firm's bid for the 61% of the satellite business it did not already own.

• Jonathan May-Bowles, who threw a foam pie at Rupert Murdoch at last week's Commons committee hearing, has been convicted of assault and causing harassment, alarm or distress.

• The chair of the Press Complaints Commission, Lady Buscombe, appears about to be the next victim of the phone-hacking scandal. She is said to be preparing to make a formal announcement of her resignation today.

• The Guardian reported yesterday that Sara Payne, whose eight-year-old daughter Sarah was abducted and murdered in July 2000, has been told by Scotland Yard that they have found evidence to suggest she was targeted by the News of the World's investigator Glenn Mulcaire, who specialised in hacking voicemail.

We will have live coverage of all today's developments as they unfold.

Sky News is reporting that Colin Myler, Tom Crone and James Murdoch will not be recalled to the culture select committee. More as we get it.

Colin Myler, the former News of the World editor, and Tom Crone, the paper's former lawyer, have said James Murdoch was wrong in his testimony to the culture committee last week.

Murdoch told the select committee that when he approved a big payout to Gordon Taylor, chief executive of the Professional Footballers' Association, he did not know phone hacking at the News of the World went beyond one "rogue" reporter. But Myler and Crone released a statement saying they informed Murdoch of an email – known as the "for Neville" email – suggesting the practice went further.

Jonathan May-Bowles, who threw a pie at Rupert Murdoch last week, pastiched the media mogul's most distinctive line at the culture committee, emerging from court to say: "This has been the most humble day of my life."

Labour MP Tom Watson has said that his attempt to recall Rupert Murdoch and his son James to give more evidence to the Commons culture, media and sport committee over phone-hacking has been voted down.

Watson revealed the rebuff by his colleagues at a news conference after the committee met today to discuss its next steps in its investigation of the scandal.

Further written evidence has to provided by 11 August. The committee will then decide which witnesses to recall.

MPs will write to law firm Harbottle & Lewis to see whether it can provide further evidence about the extent of the phone-hacking scandal now that News International has relaxed the confidentiality clauses in its contract.

John Whittingdale, the chairman of the Commons culture committee, said:

We have considered this morning the evidence we received last week from Rupert Murdoch, James Murdoch and Rebekah Brooks and subsequent statements by certain individuals have raised questions about some of the evidence we have received. As a result of that, we are going to write to ask for further details from various areas where evidence is disputed. We are writing to Colin Myler, Tom Crone, John Chapman. We are also writing to James Murdoch to follow up on a number of questions which he promised us further information last week.

My colleague Nicholas Watt was at the culture committee press conference earlier. He says it is wrong to interpret what the committee members said as suggesting James Murdoch, Tom Crone and Colin Myler would not be recalled.

John Whittingdale, the chairman of the committee, said that letters would be sent out to the three today – and former News International lawyer Jon Chapman – and that after that they would probably recall them.

What Tom Watson said was that he wanted to recall them immediately – that was voted down.

So James Murdoch, Myler and Crone are likely to be recalled to give evidence again to the culture committee.

Louise Mensch (left) is the Tory MP who accused CNN talk show host Piers Morgan of admitting to phone hacking during his time as editor of the Daily Mirror in his autobiography during last week's culture committee hearings. He furiously denied this and the relevant passages of the book do not back her up.

Now Mensch – who writes chick-lit novels under her maiden name Louise Bagshawe – has been accused of relatively minor incidents of impropriety during her years working for EMI in the 1990s, and has hit back by publishing both the allegations and her own responses and denials.

A self-described investigative journalist called David Jones accused Mensch of the following:

• Taking drugs in the company of violinist Nigel Kennedy at Ronnie Scott's in Birmingham "including dancing on a dance floor, whilst drunk, with Mr Kennedy, in front of journalists".

• Writing a novel "of a sexual nature" on her EMI work computer during working hours, leading to EMI terminating her employment.

• In the resulting novel, basing a character on her line manager Roger Lewis, and making "derogatory references" to this character.

Mensch sent out the following replies:

1. Although I do not remember the specific incident, this sounds highly probable. I thoroughly enjoyed working with Nigel Kennedy, whom I remember with affection. Additionally, since I was in my twenties, I'm sure it was not the only incident of the kind; we all do idiotic things when young. I am not a very good dancer and must apologise to any and all journalists who were forced to watch me dance that night at Ronnie Scott's. 2. Writing the first few chapters of Career Girls on my EMI computer is quite correct. However, it was all done after work hours. It was also not why I was fired by EMI. "Leaving work early" and "missing the odd day at work" along with "inappropriate dress" were the reasons quoted to me. 3. Career Girls was my first novel. I used the names of many real people I knew for minor characters, such as journalists, chauffeurs, bankers, and so forth. Roger Lewis was probably amongst them, as were (off the top of my head) Therese Coffey MP, now my colleague on the Select Committee, Jeremy Quin, Damian Hinds MP, Maurice Oberstein, Rod Clayton, James Robertson, and many more. None of them have ever complained about my using their names in this way.

She adds: "Most importantly, I have not the slightest intention of being deterred from asking how far the culture of hacking and blagging extended in Fleet Street."

Mensch embarrassed herself with her accusations against Morgan at the culture committee hearings, which were not correct, and which she would not repeat outside parliament, where she has immunity from libel law. But in my opinion she has reacted straightforwardly and admirably to this attempt to drag her name into the mud via these minor allegations. The only one of any degree of seriousness is the accusation and admission of taking drugs, although since many much more senior politicians than Mensch have admitted various kinds of drug taking in recent years this is unlikely to make any waves. And the mentions of dancing, writing a novel "of a sexual nature" during work time and making derogatory references about a character based on someone she once worked with are so irrelevant they are laughable.

As for Piers Morgan, my colleague Roy Greenslade has more on his record as Mirror editor and attitude to phone hacking here.

Piers Morgan, not surprisingly, is affecting to miss the point about his link to phone hacking. It isn't that he hacked himself or published anything that resulted from hacking while editor of the News of the World (1994-95) and the Daily Mirror (1995-2004). It's all about the fact that his past remarks on the subject show that he didn't believe it was ethically wrong to engage in the practice. (No other editor, you might note, has left any such hostages to fortune). In a series of typically show-off statements, he made it clear that (a) hacking was no big deal, (b) he knew how to do it, and (c) lots of journalists were at it … The truth about Morgan is that he viewed journalism as a game.

Nicholas Watt has just sent me the key quote from culture committee chairman John Whittingdale about recalling James Murdoch, Tom Crone, Colin Myler and Jon Chapman to give further evidence. Whittingdale said:

Obviously we want to see the responses they send to the letters we are writing. But Tom Crone and Colin Myler and apparently Jon Chapman have all said they dispute evidence given to this committee by James Murdoch. We want to hear exactly how they dispute that, in the first instance in terms of written responses. But I suspect very likely we would want to hear oral evidence. If they do come up with statements which quite plainly are different to those given to us by James Murdoch we would want to hear James Murdoch's response to that. Chances are that may well involve oral evidence again as well.

Breaking: The Press Complaints Commission has confirmed that its chair, Lady Buscombe, is to step down in January. More details soon ...

See this Guardian report for background details.

John Whittingdale, the chairman of the Commons culture committee, has just been speaking to BBC News; he reiterated that after letters went out to James Murdoch, Tom Crone, Colin Myler and Jon Chapman, he would be likely to call them to give evidence to find out if Murdoch misled the committee in his testimony last week.

We've agreed to ask them to give us those extra details … When we have received this response we may well call them in.

Whittingdale was asked why he did not go along with Tom Watson's plan to call them in immediately, which was voted down by the committee. Whittingdale said:

Because we haven't got the information yet. What I want to have is a detailed submission from those individuals who dispute part of James Murdoch's evidence … If we are to reexamine James Murdoch we need to know much more about the areas where they say he is wrong.

He was asked what sanctions he had available if anyone – ie Murdoch – were found to have misled the committee. Whittingdale said "misleading parliament is a serious matter". He would present a report to the House of Commons, and then another committee would decide how to take it forward. But he said such misleading would be relevant to the police and judicial inquiries too.

He expected James Murdoch to "find a space in his diary" as he did last time, if called.

The Guardian reported yesterday evening that Sara Payne, whose eight-year-old daughter Sarah was abducted and murdered in July 2000, has been told by Scotland Yard that they have found evidence to suggest she was targeted by the News of the World's investigator Glenn Mulcaire, who specialised in hacking voicemail.

Her cause had been championed by the News of the World, and in particular by its former editor, Rebekah Brooks. Brooks yesterday said the latest allegations were "abhorrent" and "particularly upsetting" because Sara Payne was a "dear friend". In a statement, Brooks said:

The idea that anyone on the newspaper knew that Sara or the campaign team were targeted by Mr Mulcaire is unthinkable. The idea of her being targeted is beyond my comprehension. It is imperative for Sara and the other victims of crime that these allegations are investigated and those culpable brought to justice.

Interestingly, in Brooks's speech to News of the World staff telling them the paper was going to close, which was leaked on 8 July, she lists Sara Payne as one of the hacking victims.

You can hear it here at five minutes in. Speaking about the idea of her resigning as News International chief executive – as she eventually did – she tells News of the World staff:

Say I had seen these allegations, had no idea if they weren't true, but put in my resignation and said: "Fine … I'm sick of this crisis. Someone's made an allegation against me that I've no idea if it's true and no one knows if it's true but because it's me and because it's the usual, y'know, Guardian/BBC witch-hunt I'll go." Right? Say I did that, do you think then, who would have carried the can for the dead soldiers, the 7/7 victims, Sara Payne and all the other alleged claims that came out?

As my colleague James Robinson points out, Brooks could have been referring to rumours – denied at the time, but now confirmed by the Guardian – that Payne's phone may have been targeted.

Here's the full story on Press Complaints Commission chair Lady Buscombe standing down.

Here's Nicholas Watt on the likelihood of James Murdoch being called back before the Commons culture committee.

James Murdoch is likely to be summoned to appear before MPs for a second time after a former director of legal affairs at News International joined other former executives to challenge his evidence to the commons culture select committee. John Whittingdale, the committee's chairman, said it was "very likely" that the BSkyB chairman would be asked to appear in person again if his evidence is contradicted by the former News International executives. MPs on the committee decided yesterday to write to Murdoch to ask him to explain in writing his remarks to the select committee on 19 July about his decision to approve a £700,000 payout to Gordon Taylor, chief executive of the Professional Footballers Association. Murdoch told the committee that at the time of approving the payout he had no knowledge of an email which raised questions about the News of the World's central defence in the phone hacking scandal – that it was the work one one "rogue reporter". The committee is also writing to Colin Myler, the NoW's former editor, and Tom Crone, the paper's former head of legal affairs. They issued a joint statement two days after Murdoch's evidence session saying that he did know of the so called "for Neville" email which raised the possibility that Neville Thurlbeck, the paper's former chief reporter, knew about phone hacking. Whittingdale announced that he would also be writing to Jon Chapman, News International's former director of legal affairs, who has written to the committee challenging Murdoch's evidence. Tom Watson, a Labour member of the committee who has led the campaign against phone hacking in parliament, had wanted to issue an immediate summons to Murdoch and the former News International executives. But he was outvoted after Whittingdale said that they should be asked to explain themselves in the first place in writing. Whittingdale made clear that he expects the committee will summon them in person when it meets again in the week beginning 14 August. He said: "Obviously we want to see the responses they send to the letters we are writing. But Tom Crone and Colin Myler and apparently Jon Chapman have all said they dispute evidence given to this committee by James Murdoch. We want to hear exactly how they dispute that, in the first instance in terms of written responses. But I suspect very likely we would want to hear oral evidence. If they do come up with statements which quite plainly are different to those given to us by James Murdoch we would want to hear James Murdoch's response to that. Chances are that may well involve oral evidence again as well." Whittingdale and Watson said that they were keen to ask Myler and Crone why they highlighted the importance of the "for Neville" email last week after dismissing its significance in evidence to the culture committee on 21 July 2009. A week earlier the Guardian investigative journalist Nick Davies had presented the "for Neville" email to the committee. Asked by the Guardian at today's press conference whether the Myler/Crone statement of last week raises questions about the evidence they gave to the committee in 2009, Whittingdale said: "I don't think it just raises questions. It appears to be directly contradictory."

The culture committee has today published correspondence relating to its hearings into phone-hacking last week. As my colleague Nicholas Watt points out, one of the letters includes an admission by Louise Mensch (see 1.18pm) that she was wrong to accuse Piers Morgan of admitting to phone hacking in his autobiography. Mensch writes to the committee chairman, John Whittingdale:

Dear John, I write in response to the letter sent to the Committee by Trinity Mirror, in order to correct an error in my questioning during the Committee's evidence session of Tuesday 19th July. In my questions to Rupert and James Murdoch and Rebekah Brooks, I wrongly stated that Piers Morgan, formerly editor of the Daily Mirror, had been open about personally hacking phones in a book he wrote. This was based on my misreading of an article in the Daily Telegraph published on the 13th July, which covered Mr. Morgan's description in his book of how to hack a phone and how he won the Scoop of the Year on the story of Sven-Goran Eriksson and Ulrika Johnson. The Telegraph report covers the claim of a blogger that this story was acquired by phone hacking, and I misread that as Mr. Morgan himself claiming this to be true. Therefore, I must apologise to Mr. Morgan and the Committee for this error about his book. I would have done much better to stick to quoting the figures for the Daily Mirror (and for Associated Newspapers) in "Operation Motorman", as identified in the report "What Price Privacy Now". The question for me was always was illegality confined to the News of the World and News International titles, or whether those papers had an air of entitlement in a Fleet Street culture where hacking and blagging was in fact widespread. I welcome the review announced by Trinity Mirror into practises in its newsroom. Yours ever, Louise Mensch MP

Other correspondence published today by the culture committee:

• A letter from James Murdoch saying he "answered truthfully" at the culture select committee and "I stand by my testimony". Murdoch says he is preparing a written response for the committee.

• A letter from Jon Chapman, former News International lawyer, reiterating his claim that there were "a number of serious inaccuracies" in evidence given to the select committee and saying he is happy to cooperate with them.



• A letter from Harbottle & Lewis, News International's former solicitors, confirming that their solicitor-client privilege has been waived with respect to answering questions from the police and parliamentary committees. Another letter says the firm wants to ensure "our response to you does not contain information which the Metropolitan police would prefer to be kept out of the public domain while criminal investigations and proceedings are pending".

• A letter from Sly Bailey of Trinity Mirror, publishers of the Daily and Sunday Mirror, criticising Louise Mensch for making "uncaveated statements purporting to be facts … allegations that are wholly untrue" (see 2.27pm) regarding Piers Morgan, refuting them and asking for Mensch to correct her statements. It quotes the relevant passage from Morgan's book, The Insider:

I've been called to another interview with the DTI next month. Rather worryingly, this development leads to a flurry of calls from journalists asking about it. Given that the DTI has not to my knowledge leaked anything about this case to anyone, I am mystified. But someone suggested today that people might be listening to my mobile phone messages. Apparently if you don't change the standard security code that every phone comes with, then anyone can call your number and, if you don't answer, tap in the standard four digit code to hear all your messages. I'll change mine just in case, but it makes me wonder how many public figures and celebrities are aware of this little trick.

• And here's Louise Mensch's letter of apology to Morgan (see 2.27pm).

Incidentally, Mensch refers to the information commissioner's report What Price Privacy Now? (1998), which lists publications that it has evidence to show took part in "the illegal trade in confidential personal information" (page nine). The Daily Mirror was third on the list with 681 transactions. The Observer was ninth with 103. The Guardian was not on the list.

In February this year, Stephen Pritchard, the Observer's readers' editor, explained how the paper came to be on the list.

The report, "What Price Privacy Now?", did not deal with phone-hacking – which is a criminal offence with no public interest defence – but with potential offences under the Data Protection Act, to which there is a public interest defence. And no offence is committed if the information is necessary for the prevention or detection of crime ... A cross-referencing of targets in [private investigator Steve] Whittamore's register with names that appeared in the paper establishes that many stories in the public interest were being produced. Examples include articles on racketeering landlords, radical Islamic clerics, germ warfare test victims, fugitive war criminals and crooked politicians. Where does this leave the paper today? The Observer has said that in the past it has used a private investigator to help it establish stories it believed to be in the public interest. Publishing in the public interest is entirely defensible under the Data Protection Act. And that's the important distinction: intercepting another person's phone messages is just plain illegal.

Roger Alton, the Observer editor at the time of the publication of What Price Privacy Now?, said: "Yes, the Observer has used the services of an outside agency in the past, and while there were strong public interest defences for most of those cases, it is possible that some of the inquiries did not sufficiently fit that criterion. As a result, I have now taken steps to ensure that no inquiries will be made through outside agencies unless I believe that there is a compelling public interest to do so." This instruction continues under John Mulholland, the current editor, today.

Tom Parmenter of Sky News is tweeting that Glenn Mulcaire (left), the private investigator jailed for phone hacking in 2007, has issued a statement saying he "acted on the instructions of others", expresses his regret and finishes: "In the light of the ongoing police investigation, he cannot say any more." More details soon ...

News International's original defence was that Glenn Mulcaire and NoW royal editor Clive Goodman, who was also jailed, were the only bad apples in the company. But this has been undermined by the Guardian's revelations, and Mulcaire's statement – if the Sky report is accurate – would deal it a final blow.

Here is the statement from Glenn Mulcaire's solicitors (see 3.08pm):

Glenn Mulcaire has already expressed his sincere regret to those who have been hurt and affected by his activities and he repeats that apology most sincerely. He was effectively employed by News of the World from 2002 to carry out his role as a private investigator. As he accepted when he pleaded guilty in 2007 to charges of phone interception he admits that his role did include phone hacking. As an employee he acted on the instructions of others. There were also occasions when he understood his instructions were from those who genuinely wished to assist in solving crimes. Any suggestion that he acted in such matters unilaterally is untrue. In the light of the ongoing police investigation, he cannot say any more.

It is interesting the Glenn Mulcaire statement describes him as an "employee" of the News of the World.

The prime minister is to face questions on the Leveson inquiry into phone-hacking, politicians, police and the media from select committee chairs when he faces the liaison committee on 6 September.

The liaison committee – which is made up of the chairs of all the other Commons select committees – will quiz David Cameron at 4pm for an hour and a half on 6 September, it announced today. Questions will be grouped around two themes:

• Developments in Europe; impact on the UK (presumably this refers to the ongoing eurozone debt crisis).

• Government, politics and the media.

The Liberal Democrats are calling for James Murdoch to consider his position. In a statement, the Lib Dems also call for the Press Complaints Commission to be replaced by "a bold regulator that editors can't ignore".

Lib Dem MP Don Foster said the PCC had "clearly failed" and welcomed Lady Buscombe's resignation.

Several people involved in the phone-hacking scandal have already paid for their mistakes, with one notable exception. James Murdoch should now be considering his position. Peta Buscombe joins a list that should grow longer yet.

Here's Nicholas Watt's full story on the culture committee being likely to recall James Murdoch following challenges to his evidence.

Here's another couple of good links:

• Glenn Mulcaire: I acted only on News of the World's orders

• MP Louise Mensch apologises to Piers Morgan over phone hacking comments

Glenn Mulcaire's statement comes after News International announced it had terminated "with immediate effect" its arrangement to pay the legal fees of Mulcaire in his case. The decision came after James Murdoch told the Commons culture, media and sport select committee he was "as surprised as you are" when he discovered "certain legal fees were paid to Mr Mulcaire".

But my colleague Lisa O'Carroll reported today that NI may have to continue paying Mulcaire's fees; his solicitors have written to Rupert Murdoch's News Group publishers to put them on notice that the company is still legally liable to indemnify the investigator in a high court appeal he is taking.

Sources at News International said it had verbally notified Mulcaire's representatives that it was ceasing funding Mulcaire, and had written to Payne Hicks Beach to confirm this. "If they haven't already received this letter, they will do so shortly," said the source.

Mulcaire is appealing against a high court order requiring him to identify the News of the World journalists involved in phone-hacking. Up to now this case was being funded by News International.

David Cameron has put out a message to supporters thanking them for their backing. On phone hacking, it says:

As recent weeks have shown, being in government produces all sorts of challenges that need a clear response. The hacking scandal has been shocking in terms of the dreadful things that have happened, and profound in terms of its long-term impact. I hope you agree that with a judge-led inquiry now being established; a proper police investigation under way; the BSkyB merger now off the agenda; and maximum transparency being delivered, we have dealt decisively with this issue.

Here is a summary of today's key events:

• Glenn Mulcaire, the private investigator jailed for phone hacking in 2007, has issued a statement describing himself as a former News of the World "employee" and saying he "acted on the instructions of others" (see 3.13pm).

• James Murdoch is likely to be summoned back to the culture select committee to answer questions about his evidence, following challenges to it by former News of the World figures Colin Myler, Tom Crone, and (less specifically) Jon Chapman (see 2.22pm). Myler, Crone and Chapman may also be called to give evidence.

• Louise Mensch MP has apologised to CNN talk show most Piers Morgan for wrongly saying at the culture select committee last week that he admitted phone hacking when editor of the Daily Mirror in his autobiography (see 2.27pm). She also hit back after minor allegations of impropriety.

• Lady Buscombe, the chair of the Press Complaints Commission, is standing down (see 2.21pm).

• Jonathan May-Bowles, who threw a foam pie at Rupert Murdoch during last week's culture committee hearing, has pleaded guilty to assault. He emerged from court pastiching Murdoch's most distinctive line from that session, saying: "This has been the most humble day of my life" (see 12.35pm).

My colleague Esther Addley writes that a senior police officer who worked on the Sarah Payne murder investigation has today spoken of his suspicions that his own police-issue phone was hacked by the News of the World.

Detective Chief Inspector Martyn Underhill from Sussex police, who was second in command of the Payne investigation, said he had received a "very strange phonecall" in 2002 or early 2003 from "a senior executive" at the paper threatening to print a story about his involvement with the Payne family which he believed had originated with messages left on his voicemail. "I was the main contact with Sara [Payne]," he told the BBC's World at One programme. "Sara, over a long period of time, became my friend, and we often left each other lengthy voicemails, which were intimate, because we were friends, and which could be misinterpreted or this allegation about the Payne family could have been construed from it." He had told the executive that the allegation was completely untrue, he said, and threatened to sue if they printed it. It never appeared. "The fact they didn't run the story would suggest their source was illegal," he said. Underhill said he had contacted officers from Operation Weeting with his suspicions two weeks ago, and had been told that they could not immediately find him on their database, but it would be three to four weeks before they could fully check their records. Asked about the potential implications of his phone being hacked, Underhill said: "To tap into anyone's phone is outrageous.. But if my phone was tapped, tapping into a police officer's phone has other implications, on that case and on other cases. I was running covert inquiries, sensitive inquiries, that would have been subject to answerphone messages.

Here's a link to today's World at One. The report about Underhill begins at 23.16 mins into the programme.

Over to George Michael (left) for a second. The singer has commented passionately and entertainingly on Twitter over the last couple of weeks as the News of the World phone-hacking allegations have unfolded, and today tells a story about Lady Buscombe, the outgoing chair of the Press Complaints Commission, his next door neighbour "(in the countryside, not London)".

Michael tweets:

Many years ago i had a housewarming for about 150 people, and invited my new neighbours to join us … Which they did. Baroness Buscombe, now LADY Buscombe, attended with her hubby, they stayed 2 or 3 hours, were given a tour of the house … And left all smiles :)... but a couple of hours later … She called the police and asked them to do something about the noise at my house!!!! … Wait people, it gets better! A few years later for my birthday at the same house, I thought I would turn the other cheek … (or possibly both at a certain angle)...and invited her again … She only bloody turned up! Now THAT is what you call a thick skin! … I just behaved as though it never happened. My mum [would] have been proud of that particular bit of restraint.

This is David Batty - I'm taking over the live blog for the rest of the day. You can follow me on Twitter @David_Batty

Rupert Murdoch's biographer reckons the Murdoch family won't be running News Corp in two months' time. Michael Wolff also predicts there's likely to be a massive shake-up at the company as it tries to detach itself from the "toxic" Murdoch name.

Wolff, a Vanity Fair columnist and editorial director of Adweek, told Reuters Insider TV that News Corp would face a "lifetime of litigation" if the Murdochs remained in charge.

I think actually the Murdochs have to and will step out of not only day-to-day running, but they won't have jobs within the company. To restore credibility and to restore trust to this company, the newspapers have to go and the Murdochs have to go I think at the end of the day, what we have here is that the Murdoch name is toxic. I think that this company, its shareholders, its directors, its other managers will want to get as far away from that name as possible.

The Reuters interview follows Wolff's speech at the London School of Economics last night in which he said the chance of the "discredited" James Murdoch succeeding his father as chief executive was "nil".

Wolff, also predicted that News International would soon be separated from the rest of News Corp, the New Statesman reports.

He also dismissed the claim that Murdoch was unaware of what was happening at his newspapers as "totally bogus".

Everybody in the company is doing what they think Rupert wants them to do. It all flows down from not just trying to please Rupert but from the way that Rupert wants things done – especially the newspapers.

The August edition of the New Yorker magazine takes an in-depth look at phone hacking, and contends that the scandal has its origins in the muck-racking culture encouraged by tabloid editors such as Kelvin MacKenzie.

The seeds of the current crisis were planted long ago. If your attitude toward the lives of others is that of a house burglar confronted by an open window; if you consider it part of your business to fabricate conversations where none exist; and if your boss treats his employees with a derision that they, following suit, extend to the subjects of their inquiries—if those elements are already in place, then the decision to, say, hack into someone's cell phone is almost no decision at all. It is merely the next step. All that is required is the technology. What ensues may be against the law, but it goes no more against the grain of common decency than any other tool of your trade.

The article also has a rather wonderful description of Rupert Murdoch's appearance at the Commons culture select committee hearing on July 19:

Here was no beast, no warper of souls or glutton for companies; here was an oldster, tortoise-slow on the uptake, with head drooping, shoulders slumped, rousing himself now and then to make a point by slapping the table before him. Though meant to sound decisive, the slap reminded some viewers of a grumpy grandpa asking when his Jell-O would be served.

Sara Payne says she was "very distressed and upset" to hear she may have been hacked by a private investigator working for the News of the World.

In a statement to the Press Association, Payne said:

I am, as you can image, very distressed and upset by the news that my details have been found on Mulcaire's list and would like to thank everyone for their kind words of support. I can confirm reports that I was given a phone by the campaign team and that my voicemail was only activated after my first aneurysm. Notwithstanding the bad apples involved here, my faith remains solidly behind all the good people who have supported me over the last 11 years. I will never lose my faith in them. My way would be to challenge the bad apples head-on, learn from the facts of the matter and be a proactive part of stopping this from happening again. I'm away with my children and family at the moment. For their sake and for the sake of the on-going investigation, I can make no further comment at this time.

Scotland Yard has opened an investigation into allegations of computer hacking by the News of the World, Channel 4 News reports.

Former army intelligence officer Ian Hurst (aka Martin Ingram) told the programme that the Metropolitan Police is now formally investigating his claim that his computer was hacked by a private investigator working for the tabloid paper.

Hurst said:

Police officers working for Operation Tuleta have informed me that they have identified information of evidential value in regards to my family's computer being illegally accessed over a sustained period of 2006. The decision by the Metropolitan Police to proceed to a full criminal investigation was conveyed to me this week by Tuleta police officers.

The Met has issued a statement, saying:

Since January 2011 the Metropolitan Police Service has received a number of allegations regarding breach of privacy which fall outside the remit of Operation Weeting, including computer hacking. Some aspects of this operation will move forward to a formal investigation. There will be a new team reporting DAC Sue Akers. The formation of that team is yet to take place.

Earlier this year Panorama reported that a NoW investigator had hacked into Hurst's emails when he ran IRA informers in Northern Ireland.

Here's what the Guardian's Nick Davies wrote last month about the hacking of Hurst's emails:

The successful hacking of a computer belonging to the former British intelligence officer Ian Hurst was achieved in July 2006 by sending Hurst an email containing a Trojan programme which copied Hurst's emails and relayed them back to the hacker. This included messages he had exchanged with at least two agents who informed on the Provisional IRA — Freddie Scappaticci, codenamed Stakeknife; and a second informant known as Kevin Fulton. Both men were regarded as high-risk targets for assassination. Hurst was one of the very few people who knew their whereabouts.

A piece on the LSE politics blog argues that the phone-hacking scandal is "just the tip of the iceberg of unelected oligarchies and corporate power in Britain's democracy".

Professor David Beetham writes:

News International has been unique in its descent to pervasive illegality to maximise sales and profits. Yet it shares the same features that have compromised British democracy from across the corporate sector. These include the use of offshore tax havens, complex legal entities and transfer pricing to minimise the tax contribution of businesses to our public services. They have shared a common anti-public sector agenda which has shaped public opinion and government policy alike: privatisation and outsourcing of government functions and services; cutting the 'burden' of government regulation and promoting self-regulation; lowering taxes, especially on business and the wealthy; remedying the deficit in public finances in short order. This agenda has become embedded at the heart of government through a range of corporate stratagems – personal contact with politicians, lobbying power, financing political parties and think tanks, the 'revolving door' between business and government appointments, joint partnerships, corporate hospitality, and so on – which have brought governments of all parties under their sway.

Here's the Guardian's latest report on MP Louise Mensch's apology to Piers Morgan for using parliamentary privilege to link the CNN presenter and former Mirror editor to the phone-hacking scandal.

My colleague James Robinson also looks at how being linked to the scandal may affect Morgan's US career.

Elsewhere, Mensch's revelation that she was apparently targeted by an "investigative journalist" called David Jones, who seemingly threatened to expose her relatively minor incidents of impropriety during her twenties, is attracting much interest online.

There is growing speculation over the identity of "David Jones", particularly as to why he copied in both Patrick McLoughlin, the Tory Chief Whip, and the chair of the Conservative Party into the accusatory email to the MP and chick-lit novelist.

Here's the latest Guardian report on the growing pressure on David Cameron over his hiring of former News of the World editor Andy Coulson.

Ivan Lewis, the shadow culture secretary, is demanding to know if Coulson ever saw documents inside Downing Street that should have been available only to staff with the highest level of security clearance.

In his letter to the prime minister, Lewis also asks whether Cameron was consulted over the decision not to seek the highest level security clearance for Coulson.

Scotland Yard's confirmation that it is assembling a new team to probe allegations of computer hacking makes the front page of tomorrow's Independent. It appears alongside a report on Tory MP Louise Mensch's claim that she was targeted by an investigative journalist over minor misdemeanors in her younger days.

Here's the Guardian's latest editorial on phone hacking, which consider the impact of the resignation of Lady Buscombe as chair of the Press Complaints Commission, and the troubling questions that remain about how Andy Coulson came to be appointed to his role at No 10.

Newsnight has more reaction to Louise Mensch's claims that she was targeted by an investigative journalist.

Labour MP Tom Watson told the programme that he did not care what Mensch "did in nightclubs in the 1990s".

He added:

What she has effectively done today is give a very big finger to a low life journalist who is trying to dig up dirt on her from many years ago, probably because she is involved in exposing the truth about hacking and what went on on our committee.

Conservative MP Jacob Rees-Mogg, who was at Oxford University at the same time as Mensch said he had only ever seen her enjoying a "small glass of sherry".

Although there was no proof there was an attempt to target her because of her involvement in the hacking probe "the timing is suspicious", he added.

We're closing this live blog but there will be more coverage of phone hacking online tomorrow and in the Observer on Sunday.

In the meantime, here's a round-up of today's main developments:

• Scotland Yard is to expand its investigations into unlawful newspaper practices by setting up a new task force to examine claims of computer hacking by the News of the World. The Metropolitan Police said a formal investigation would be launched to take forward Operation Tuleta, which was set up to examine the use of "Trojan" emails that gives a hacker full access to a target computer's contents by infecting it with a virus. The new team, reporting to Deputy Assistant Commissioner Sue Akers, will investigate matters not covered by Operation Weeting, the force's phone hacking probe.

• Glenn Mulcaire, the private investigator jailed for phone hacking in 2007, has issued a statement describing himself as a former News of the World "employee" and saying he "acted on the instructions of others".

• James Murdoch is likely to be summoned back to the culture select committee to answer questions about his evidence, following challenges to it by former News of the World figures Colin Myler, Tom Crone, and (less specifically) Jon Chapman. Myler, Crone and Chapman may also be called to give evidence.

• Louise Mensch MP has apologised to CNN talk show most Piers Morgan for wrongly saying at the culture select committee last week that he admitted phone hacking when editor of the Daily Mirror in his autobiography. She also said she had been targeted by an investigative journalist over minor allegations of impropriety in her twenties.

• Lady Buscombe, the chair of the Press Complaints Commission, is standing down.

• Jonathan May-Bowles, who threw a foam pie at Rupert Murdoch during last week's culture committee hearing, has pleaded guilty to assault. He emerged from court pastiching Murdoch's most distinctive line from that session, saying: "This has been the most humble day of my life".

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