LONDON (Reuters) - Britain said on Thursday it would not proceed with the second part of an inquiry into newspaper ethics called after a phone-hacking scandal at a Rupert Murdoch tabloid, prompting criticism it was betraying victims of press intrusion.

Slideshow ( 3 images )

Media Secretary Matt Hancock said it was not in the national interest to go ahead with part two of the Leveson Inquiry which laid bare the cozy ties between British leaders, police chiefs and press barons in its initial conclusions in 2012.

“We do not believe that reopening this costly and time consuming public inquiry is the right way forward,” Hancock told parliament. “We are formally closing the inquiry.”

The inquiry, led by senior judge Brian Leveson, was called by former Prime Minister David Cameron in 2011 as Britain reeled from disclosures of wrongdoing at media tycoon Murdoch’s News of the World newspaper, including the revelation journalists had hacked the phone of a 13-year-old murder victim.

The paper’s former editor, Andy Coulson who was later Cameron’s media chief, was among journalists convicted of phone-hacking and jailed.

Murdoch closed the tabloid following the revelations but his opponents, who argue he has far too much sway over British political leaders through his empire, have tried to use the scandal to try to stop his bid to take full control over Europe’s biggest pay-TV group Sky Plc.

The inquiry’s first part heard evidence from more than 300 people and along with police investigations cost almost 50 million pounds ($68 million). Leveson concluded there should be an independent press watchdog enshrined in law but Cameron rejected this and newspapers instead established a new self-regulatory system.

Hancock said there had in the past been far too many cases of terrible behavior by the press but the regulator had made significant progress.

He said there had been a seismic change in the media landscape with newspaper circulation falling by about 30 percent since Leveson reported, and there was now an urgent need to address fake news and largely unregulated social media.

“The steps I have set out today will help give Britain a vibrant, independent and free press that holds the powerful to account and rises to the challenges of our times,” he said.

Tom Watson, the opposition Labour Party’s media spokesman who has long been a fierce critic of Murdoch, said Prime Minister Theresa May’s Conservatives, who enjoy the support of the biggest-selling national newspapers, had been looking for a chance to renege on promises to phone-hacking victims.

He said the second part of the inquiry would have examined the extent of illegality and management failures at Murdoch’s British newspaper operations, along with whether police received corrupt payments not to investigate wrongdoing.

“None of these questions have been answered,” Watson said. “This announcement conveniently timed to be buried under a flurry of snow is a disappointment, a breach of trust and a bitter blow to the victims of press intrusion.”

Labour leader Jeremy Corbyn last week dismissed as nonsense press reports that he had given secrets to a Communist spy in the 1980s, leading him to warn newspapers that “change is coming” and that media bosses who he said abused their power were right to be worried about his party winning power.

($1 = 0.7272 pounds)