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Pressure on James Murdoch Is About to Intensify

After his testimony in Parliament was challenged by two former senior employees and referred by a lawmaker to Scotland Yard for investigation, James Murdoch has come under rising pressure in Britain’s phone hacking scandal that is likely to intensify this week. The board of British Sky Broadcasting, the satellite broadcaster of which Mr. Murdoch is … Continued

After his testimony in Parliament was challenged by two former senior employees and referred by a lawmaker to Scotland Yard for investigation, James Murdoch has come under rising pressure in Britain’s phone hacking scandal that is likely to intensify this week.

The board of British Sky Broadcasting, the satellite broadcaster of which Mr. Murdoch is chairman, convenes on Thursday for the first time since the scandal erupted, as regulators continue their inquiry into whether the hacking scandal means the broadcaster should continue to be considered “fit and proper” to hold a broadcasting license. A day later, members of the parliamentary committee investigating the scandal are to meet to consider whether to ask for more information from Mr. Murdoch and whether to call him and former executives back in front of them to answer additional questions.

Some former senior executives of News International who until recently held powerful positions in the News Corporation's British subsidiary and were privy to internal deliberations have indicated that they believe Mr. Murdoch knew more about widespread phone hacking at The News of the World than he indicated in his public testimony. If they continue to challenge Mr. Murdoch's account, it could damage his effort to protect his own reputation and that of the parent company run by his father, Rupert.

“It now seems to be everyone for themselves,” said Paul Farrelly, a Labour member of Parliament who has been a prominent critic of News International. “The edifice is cracking; they're all fighting like rats in a sack.”

Last week, the two former executives, Colin Myler, who was editor of The News of the World until it closed this month, and Tom Crone, the former legal manager for News International, accused him of making “mistaken” statements to Parliament in his testimony on Tuesday.

A third, Jon Chapman, News International's director of legal affairs until this month, said in a statement last week he was also preparing to cooperate fully with the Parliament investigation and wanted to correct “serious inaccuracies” in the evidence given by Mr. Murdoch to lawmakers. Mr. Murdoch issued a statement insisting he stood by his remarks.

Mr. Murdoch could also face a challenge from another source, according to several lawyers and executives with knowledge of the proceedings. The source is an outside attorney who was also privy to discussions surrounding a confidential settlement to a phone hacking victim in 2008, which Mr. Murdoch approved, according to several lawyers with knowledge of the proceedings.

Mr. Murdoch said he had relied on “outside counsel” in settling that case.

One of the lawyers providing outside counsel was Julian Pike, a partner of the London firm Farrer & Company, the queen's lawyers. Mr. Pike, who is on sabbatical until September 5, was at times directly engaged in discussions with the lawyers for the soccer union leader Gordon Taylor, who was the first victim of phone hacking to sue News International, the lawyers and executives said.

File notes that Mr. Pike took of his internal discussions with News International executives during 2008 could be pursued by Scotland Yard as part of a criminal inquiry, said two officials with knowledge of the police inquiry.

“So far, it's two against one,” said a lawyer with first-hand knowledge of the proceedings who spoke on the condition of anonymity, referring to Mr. Crone's and Mr. Myler's word about the negotiations against Mr. Murdoch. “But if two more lawyers step forward to contradict Mr. Murdoch's evidence, it would raise even more profound questions.”

Mr. Pike and several of his assistants did not return repeated messages asking for comment. News International would not comment on whether it was prepared to lift client confidentiality restrictions on Mr. Pike or Farrer & Company, as it has with another outside law firm used, so they could speak to the police and Parliament.

Mr. Murdoch told the committee that he relied on the advice of “outside counsel” when he agreed to settle the case brought by Mr. Taylor for £725,000, which was then about $1.4 million, a settlement that was far beyond what privacy violation cases were being settled for at the time. Most were being settled for £3,000 to £12,000, lawyers with knowledge of such cases said.

In Mr. Taylor's case, The News of the World did not even publish a story about him based on the information gleaned from hacked messages, lawyers have said.

Tom Watson, a Labour member of Parliament, said Sunday that he had written to Scotland Yard to look into the conflicting accounts of internal News International discussions surrounding the confidential settlement in 2008 to determine whether there was a conspiracy to pervert the course of justice in the settlement of Mr. Taylor's lawsuit.

Oversize payments to conceal evidence of a crime by confidentially settling a lawsuit could run afoul of the law, Mr. Watson said.

Prior to settling the lawsuit by Mr. Taylor, the company was shown evidence that appeared to implicate another reporter in phone hacking. At the time, the company repeatedly emphasized in public that the hacking had been the work of one rogue reporter, who had been convicted for intercepting the voice mail messages of the royal family.

Mr. Watson addressed his letter to Sue Akers, the Scotland Yard chief leading the two police inquiries into phone hacking and police corruption.

In his testimony last week, Mr. Murdoch acknowledged that he was aware that hacking was a crime. However, he said he was never told that underlying evidence in the case implicated an additional reporter at the tabloid.

He emphasized that he thought the evidence related to Clive Goodman, the former royal reporter, who had already been jailed, and therefore pointed only to an old crime that had been adjudicated. Mr. Myler and Mr. Crone, however, said that Mr. Murdoch was “mistaken” and had been shown the underlying evidence in the case. That evidence included an e-mail with transcriptions of Mr. Tayloy's voice mail messages marked “for Neville”; the only Neville at the newspaper was Neville Thurlbeck, The News of the World's chief reporter, who has since been arrested in the hacking investigation.

Another key piece of evidence was an audiotape, in which Glenn Mulcaire, a private investigator who was also involved in hacking at The News of the World, is heard coaching an unnamed reporter on how to hack Mr. Taylor's cellphone.

The judge in the case, Justice Vos, ordered Mr. Mulcaire to identify the reporter on the tape and the “Neville” named in the document. Within days of making that order in June 2008, lawyers for News International quickly settled the lawsuit and insisted on confidentiality of the settlement's terms. And neither the reporter nor Mr. Thurlbeck was identified.

Mr. Murdoch also said he thought the £725,000 payout to Mr. Taylor, believed to be a record amount many times over at the time, was reasonable.

Mr. Watson has asked members of the Parliamentary committee holding hearings into the matter to recall Mr. Murdoch. He also has requested that Mr. Myler and Mr. Crone be called. He said the committee meets on Friday and a decision will be made then.

When Mr. Myler and Mr. Crone contradicted Mr. Murdoch on Thursday, it was significant because it marked the first time former News International executives had contradicted a senior executive's evidence. Both Mr. Crone and Mr. Myler have testified previously about the settlement before the same select committee that Mr. Murdoch appeared before on Tuesday.

Mr. Chapman was involved in settling the unfair dismissal suit brought by Mr. Goodman in 2007. He also reviewed the trove of internal e-mails between Mr. Goodman and some senior staff members that were forwarded to an external London law firm, Harbottle & Lewis, representing News International.

Last December, Mr. Pike said in a statement to the High Court that these e-mails could no longer be retrieved because they were more than six months old. But in March he apologized, saying he had been misinformed by Mr. Crone, who had told him that he had also been misled. The e-mails have since been given to the police.

The phone hacking scandal has already claimed two senior executives within News Corporation — Rebekah Brooks, who was chief executive of News International, and Les Hinton, who ran Dow Jones in the United States.

Despite those resignations, a leading British police officer, Sir Hugh Orde, president of the Association of Chief Police Officers, on Sunday said that Rupert Murdoch was still “in complete denial” about the scandal and had refused to take responsibility himself for wrongdoing within his newspaper empire.

He contrasted Mr. Murdoch's behavior to the resignation of Sir Paul Stephenson, commissioner of the Metropolitan Police who resigned last week. “Compare that to Rupert Murdoch: complete denial of any responsibility of his organization,” he told BBC television.

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