This report on News International and phone-hacking is the toughest our committee has ever produced. Two years ago, the culture, media and sport select committee found News International guilty of "collective amnesia" and said it was "inconceivable" that no one beyond the News of the World's royal editor Clive Goodman and private investigator Glenn Mulcaire was involved.

This has become the fastest moving of stories, with fresh revelations daily, and the latest came at the Leveson inquiry last week. Meanwhile, key evidence remains shrouded in court confidentiality. Our commitee's biggest challenge has been the many arrests. Parliamentary reports enjoy "privilege"; we can say what we like with legal immunity. But, like the Guardian, we have no wish to prejudice any future trials.

Throughout this scandal, however, we have found that News International misled the committee. In our report we say: "Its instinct throughout, until it was too late, was to cover up rather than seek out wrongdoing and discipline the perpetrators.

"In failing to investigate properly, and by ignoring evidence of widespread wrongdoing, News International and its parent News Corporation," we conclude, "exhibited wilful blindness, for which the companies' directors – including Rupert Murdoch and James Murdoch – should ultimately be prepared to take responsibility."

We were far from impressed with News International's strategy to deal with hacking. Two years ago, it wheeled out an "aggressive defence", damning the committee and the Guardian, making statements people there knew to be untrue. Its discredited "one rogue reporter" defence, we now know, was thought misleading from the outset by its in-house lawyer, Tom Crone. While its external lawyers, the Queen's solicitors Farrer & Co, knew it to be false as soon as Crone and Colin Myler – editor of the News of the World – opened their mouths to us in 2009 because they already had the infamous "for Neville" email and a damning QC's opinion.

That did not stop News International, though, from maintaining the four-year fiction to February last year against the actress Sienna Miller, who with other courageous civil claimants unearthed so much truth. Those denials contrast with the company's insistence it had turned a bright, shiny new leaf following its "epiphany" in December 2010 when, James Murdoch told us, they first rumbled the truth during the Miller case.

This, in itself, we found astonishing. But in reality, since we concluded, "News Corporation's strategy has been to lay the blame on certain individuals, particularly Colin Myler, Tom Crone and Jonathan Chapman [NI's then director of legal affairs], and lawyers, while striving to protect more senior figures, notably James Murdoch, from criticism."

Les Hinton – Rupert Murdoch's consigliere of 50 years, who resigned last year – had long fallen by the wayside. Hinton, we found, had also misled us over payoffs to Goodman. James Murdoch's consistent denials invited the conclusion that, because of Crone and Myler's lack of reliability in other respects, he had no inkling until so late in the day. Because of the contradictory accounts between them all, however, we simply could not decide.

But – given the constraints set by the arrests, too – was it right that Myler, Crone and Hinton should carry the whole corporate can? No, we concluded: "Corporate culture comes from the top. In the case of the News of the World, this is ultimately the American parent company of News International and its chairman and chief executive, Rupert Murdoch."

The whole saga raises questions about James Murdoch's competence. Unlike the son, print and ink runs deep in Rupert Murdoch's veins and he is not a hands-off proprietor; indeed, Rebekah Brooks told us that, when chief executive of NI, she would talk to him "every other day".

There are many examples of questionable practices at the News of the World, all in the public domain – from the Operation Motorman inquiry into the use of private detectives, to the judge's comments about blackmail in the newspaper's sting on Max Mosley.

Yet no action was taken. "This culture," we considered, "permeated from the top throughout the organisation and speaks volumes about the lack of effective corporate governance at News Corporation and News International." We concluded, therefore, "that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company".

This is, sadly, not the end of the affair. The police and the Crown Prosecution Service do not come out smelling of roses, either. We have reserved our right to publish further findings following the Metropolitan police's investigation and any future criminal trials.

The House of Commons will now consider punishment – and important lessons for parliament. "The integrity and effectiveness of the select committee system," we conclude, "relies on the truthfulness of evidence. The behaviour of News International and certain witnesses in this affair demonstrated contempt for that system in the most blatant fashion."

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