Murdoch withdraws bid for BSkyB

LONDON -- Rupert Murdoch's dream of controlling a British broadcasting behemoth has evaporated after he withdrew his bid for BSkyB -- the latest, biggest casualty of what Prime Minister David Cameron called the hacking "firestorm" sweeping through British politics, media and police.

Cameron appointed a senior judge to lead an inquiry into the phone-hacking and police-bribery scandal engulfing Murdoch's British newspapers, and promised it would investigate whether Murdoch's reporters sought the phone numbers of 9/11 victims in their quest for sensational scoops.

"There is a firestorm, if you like, that is engulfing parts of the media, parts of the police, and indeed our political system's ability to respond," Cameron said yesterday in the House of Commons. "What we must do in the coming days and weeks is think about all of the victims . . . to make doubly sure that we get to the bottom of this and that we prosecute those who are responsible."

As all main political parties united to demand that News Corp. withdraw its bid for British Sky Broadcasting, the media magnate bowed to the inevitable, accepting that he could not win government approval for the multibillion-dollar takeover.

Shares in BSkyB fell 4 percent after the announcement, but rebounded as uncertainty about the company's immediate future was lifted and closed 2 percent higher.

Murdoch had hoped to gain control of the 61 percent of BSkyB shares he doesn't already own. Just a week ago, the takeover had appeared certain to succeed, despite concerns about the size of his share of the British media market. The deal unraveled with stunning speed after revelations that the tabloid News of the World had hacked into the phone of murder victim Milly Dowler, 13, and may have impeded a police investigation into her disappearance.