Shares in News Corporation have fallen 4.3% in New York amid mounting pressure as the phone-hacking scandal develops.

Earlier, News Corp shares in Sydney dropped by 7.6% to a two-year low.

The group is lifting its management and standards committee out of News International so that it will become a part of News Corp.

Meanwhile, another small shareholder has written to the board urging it to raise its standards of transparency and governance.

The Nathan Cummings Foundation in New York, a small shareholder in News Corp, wrote: " Given the shocking allegations about News International's practices in Britain, which have raised questions about the company's credibility and had a significant downward impact on its stock price, we believe it is now more important than ever that the company is transparent about its political spending and policies."

The Foundation is concerned about News Corp's political lobbying, particularly payments to organisations that have then campaigned for looser regulation which could potentially benefit its businesses.

Reorganisation

Revelations and developments about News Corporation's UK newspaper business, News International, continue to come thick and fast.

Earlier, the US Department of Justice said it had spoken to the UK's Serious Fraud Office about how to investigate claims the company's News of the World title had paid police for information.

The reorganisation of News Corp's standards committee, set up to investigate impropriety at News International, will see it come under the part-time chairmanship of a well-known barrister, Lord Grabiner.

Two senior News International employees - William Lewis and Simon Greenberg - will give up their current jobs and become News Corp staff.

Separately, a decision is expected by the end of the week on whether James Murdoch should stay as BSkyB chairman.

James Murdoch is deputy chief operating officer at News Corporation and heads their operations in Europe and Asia.

There is a growing view among non-executives at broadcaster BSkyB that the burden of "fighting the fires" at News Corp means that he will find it hard to devote enough time to chairing BSkyB, BBC business editor Robert Peston said.

But he added that if Mr Murdoch were asked to step aside, it would likely be for only a temporary period.

Investigations?

The US Department of Justice's interest in News Corp stems from the fact that its headquarters are in New York, but its shares are listed in both the US and Australia.

The likelihood is that James Murdoch will be asked to stand down as chairman at least temporarily, until News International - the UK arm of News Corporation - has been stabilised Read Robert's blog in full

It is illegal for any US company to pay bribes to overseas officials, under the Foreign Corrupt Practices Act.

Business editor Robert Peston said the Department of Justice had not yet launched a formal investigation, but its conversations with the Serious Fraud Office (SFO) showed that it was actively considering whether it needed to launch such an investigation.

The SFO also confirmed that it had received a letter from Labour MP Tom Watson calling on it to investigate "certain allegations relating to News Corp".

"SFO director Richard Alderman will give full consideration to Mr Watson's letter," a statement said.

Leadership change?

Earlier, shares touched a two-year low of A$13.65 in Sydney, before closing down 4.1%.

The slide in News Corp's share price comes as an investigation into phone hacking in the UK widens.

News Corp's stock has now lost almost a fifth of its value since the start of July, with the share price of its common stock in New York falling from $18.50 to $16.09.

Analysts say the events of the past few days have caused major damage to the company, as 19% of its total value has evaporated.

"You're now looking at [about] $10bn wiped off the value since the peak," said Stephen Mayne, director of the Australian Shareholders' Association.

Mr Mayne also said that independent directors at the firm have been discussing a change in leadership.

"The shareholder pressure, particularly today's tumultuous fall on Australian markets after the amazing developments over the weekend, is clearly showing that this is a gathering storm," he said.

Although some reports suggest this may not be the case.

Tom Perkins, who is on the board of News Corp, denied that any such discussions were taking place in an emailed response to Reuters news agency.

Widening probe

News Corporation is the parent company of News International, which runs the Sun, the Times and Sunday Times. Their sister paper, the News of the World, was shut down earlier this month as a result of the phone-hacking scandal.

On Sunday, ex-News International chief executive Rebekah Brooks was arrested by police in the UK on suspicion of conspiring to intercept communications and on suspicion of corruption.

Mrs Brooks has denied wrongdoing, and was released on bail at midnight (2300 GMT).

Her spokesman said she was still happy to appear before the UK Parliament's Culture, Media and Sport Committee on Tuesday.

Rupert and James Murdoch are also to appear before the MPs.

In another twist, it was announced on Monday that Metropolitan Police Assistant Commissioner John Yates had resigned, as the Metropolitan Police Service continues to be criticised for its handling of the phone-hacking scandal.

His departure comes a day after his boss, Commissioner Sir Paul Stephenson, also announced he was standing down.

Sir Paul, Britain's most senior police officer, was criticised for hiring former News of the World executive Neil Wallis - who was questioned by police as part of the probe into hacking - as an adviser.