

Rupert Murdoch's media giant News International could face a judicial inquiry after a highly critical parliamentary report today accuses senior executives at its top-selling newspaper of concealing the truth about the extent of illegal phone hacking by its journalists.

The 167-page report by a cross-party select committee is withering about the conduct of the News of the World, with one MP saying its crimes "went to the heart of the British establishment, in which police, military royals and government ministers were hacked on a near industrial scale".

MPs condemned the "collective amnesia" and "deliberate obfuscation" by NoW executives who gave evidence to them, and said it was inconceivable that only a few people at the paper knew about the practice.

The culture, media and sport select committee was also damning of the police, saying Scotland Yard should have broadened its original investigation in 2006, and not just focused on Clive Goodman, the NoW's royal reporter.

The findings provoked calls by the ­Liberal Democrats for a judicial inquiry, and an unusually strong reaction from a cabinet minister, Ben Bradshaw, and Downing Street. Bradshaw, the media secretary, said the report raised "extremely serious questions" for the Murdoch empire.

"This report … says lawbreaking was condoned and that the company sought to conceal the truth. We welcome the report and are considering what further action may be needed to be taken."

No 10 also issued a statement, saying: "The scale of this is absolutely breathtaking and an extreme cause for concern."

Chris Huhne, the Lib Dem home affairs spokesman, said: "The only alternative to get to the bottom of what actually went on at the News of the World is a judicial inquiry so that a judge can insist on information and can draw out the lessons if we are to avoid such wholesale abuse of privacy again."

News International questioned the credibility of the committee and accused it of pursuing a "party political agenda".

The committee has been investigating phone hacking by the News of the World as part of a wide-ranging inquiry that also looked at issues of libel law reform, ­privacy and regulation of the press.

Today's report makes sweeping criticisms of press self-regulation, describing the Press Complaints Commission as "toothless"; decries the reporting of the Madeleine McCann story, saying there was an inexcusable lowering of standards; and recommends changes to libel law and limits on the use of superinjunctions.

But it is the section relating to phone-hacking that could yet have the most impact. The MPs' inquiry into the practice was reopened after the Guardian's revelation last July that the News of the World had secretly paid out £1m in costs and in settlements to Gordon Taylor, chief executive of the Professional Footballers' Association, and two others, over phone hacking allegations.

The committee, which took evidence from executives from News International, said financial settlements paid by the News Group newspapers left them with "a strong impression silence has been bought".

The report condemned the paper's own inquiry into how widespread the practice was "far from 'full' or 'rigorous'," as it had assured MPs and the Press Complaints Commission.

MPs were scornful of the newspaper's repeated insistence that Goodman, who was jailed for hacking into the private voicemails of royal aides, was a "rogue reporter", acting alone and that no one else on the newspaper knew about or condoned phone hacking.

Today's report makes a nonsense of the claim, saying it was "inconceivable" that Goodman was alone in knowing about phone hacking.

It details contradictory testimony by New International executives, and what it termed "collective amnesia" and "deliberate obfuscation" by witnesses.

The organisation's chief executive, Rebekah Brooks, repeatedly refused to give evidence to the MPs.

In a unanimous finding, the cross-party committee said: "We strongly condemn this behaviour which reinforces the widely held impression that the press generally regard themselves as unaccountable and that News International in particular has sought to conceal the truth about what really occurred."

The report states that it is now likely the number of phone-hacking victims "will never be known".

The MPs vindicate the disclosures originally published by Guardian writer Nick Davies, and said that the committee had found new evidence confirming them.

The committee avoids making accusations against the most politically sensitive figure involved, Andy Coulson, the editor of the News of the World at the time and now the director of communications at Tory HQ.

The report says there was no evidence that he knew of phone hacking. However, the MPs said he was right to quit over phone hacking.

"That such hacking took place reveals a serious management failure for which as editor he bore ultimate responsibility, and we believe that he was correct to accept this and resign," the MPs say.

Today's report is also unsparing about the behaviour of two bodies whose original duty it had been to investigate the evidence against the News of the World.

It says the Metropolitan police were wrong not to broaden their investigation into the Mulcaire case in 2006.

The MPs reject testimony by assistant commissioner John Yates that there had only been "a handful" of hacking victims of the News of the World. Former minister Tom Watson, a member of the committee, said at the press conference at the Commons: "Scotland Yard are sitting on a whole bank of information and data about very senior people in public life who were hacked, that the public don't know about." He called for the information commissioner to access all the police files and see if any legal breaches had occurred.

Watson, added that the phone-hacking scandal had "gone to the very heart of the British establishment".

"The police, the military, the royals, the government ministers have been hacked on a near industrial scale," he said.

The other body which failed in its task was the Press Complaints Commission, the committee report says. The PCC had rushed out a report purporting to exonerate the News of the World that took the paper's claims of innocence at face value. "We find the conclusions in the PCC's November report simplistic and surprising. It has certainly not fully, or forensically, considered all the evidence."

The Murdoch organisation reacted by issuing a wholesale attack on the good faith of the committee, which has a Conservative chairman, John Whittingdale.

A statement issued on behalf of News International claimed members were in a political conspiracy with the Guardian, which had originally published new evidence of the hacking, and whose editor, Alan Rusbridger, testified in public at the committee hearings.

The statement said that News International "strongly rejected" the findings.

A statement from the Guardian described the report as "insightful and wide-ranging".

It said: "The press has a proud record of shining a light into the darkest corners of our public institutions. As an industry we need to show we are willing to accept the same level of scrutiny and accountability. We are therefore pleased that the committee has recommended improving the self-regulatory system.

"Also encouraging are the committee's comments on libel, excessive legal costs and superinjunctions, all of which are being used by corporations and wealthy individuals to suppress free speech both here and abroad. However, there remains a great deal of work to be done to convert concerns and recommendations into meaningful actions."

The statement added: "We are surprised that News International has questioned the integrity of a cross-party committee, with a Conservative MP in the chair, ­carrying out an independent inquiry as is its historic parliamentary right.

"Observers will draw their own conclusions about why they have chosen to make this attack.

"According to the report, the MPs took a vote on only four clauses, unanimously agreeing on more than 570 paragraphs. It is insulting to the committee to question their work in this way."