News Corp chief executive Rupert Murdoch said sorry on Friday to victims of phone hacking at one of his British tabloids after confidante Rebekah Brooks quit as head of the media empire's British newspaper arm.
The twin steps were designed to quell an escalating scandal that has forced Murdoch to close the News of the World newspaper and drop a $12 billion plan to buy full control of pay TV operator BSkyB .
The crisis engulfing his company has also broken the spell that Murdoch, 80, has held over British politics for three decades as leaders from Margaret Thatcher to current conservative Prime Minister David Cameron sought his support.
The apology will be carried in all national newspapers this weekend under the headline "We are sorry". The text was released by the company's News International UK arm.
"The News of the World was in the business of holding others to account. It failed when it came to itself," Murdoch wrote in an article signed off "Sincerely, Rupert Murdoch".
"We are sorry for the serious wrongdoing that occurred. We are deeply sorry for the hurt suffered by the individuals affected," he added.
"In the coming days, as we take further concrete steps to resolve these issues and make amends for the damage they have caused, you will hear more from us."
Bye, bye brooks
Brooks resigned as chief executive of News International on Friday, yielding to political and investor pressure over a phone hacking scandal that has spread across the Atlantic.
The 43-year-old Brooks, a former editor of the scandal-hit News of the World and of flagship daily tabloid The Sun, was a favourite of Rupert Murdoch, who described her as his first priority when he flew in to London this week to manage the crisis at News Corp's British newspaper unit.
In her place, he named a trusted News Corp veteran, New Zealander Tom Mockridge, who has spent the past eight years running the group's Sky Italia television interests in Italy.
Speaking before Brooks's resignation to the Wall Street Journal, which he owns, Rupert Murdoch defended the way his managers had handled the crisis.
He spoke of "minor mistakes" and dismissed suggestions, floated by some shareholders, that he should sell off the troubled newspaper businesses on which his empire was founded but which bring in only limited profits.
British Prime Minister David Cameron is under fire for his personal relationship with Brooks as well as for hiring another ex-editor of the News of the World as his spokesman.
He has now launched a judicial inquiry into the phone-hacking affair, which also includes allegations of corrupt payments to police by journalists.
Rupert Murdoch, a US citizen, has been courted for decades by Britain's political elite as a kingmaker who could influence voters to shift left or right.
He now faces a showdown with parliament on Tuesday when lawmakers on the media committee grill him, his son James and Brooks. During an angry debate this week, one legislator called him a "cancer on the body politic".
"Rogue reporter" defence dropped
Brooks, whose youth, mane of red hair and former marriage to a soap opera star have helped give her a high public profile in Britain, said in a message to staff:
"My desire to remain on the bridge has made me a focal point of the debate. This is now detracting attention from all our honest endeavours to fix the problems of the past.
"Therefore I have given Rupert and James Murdoch my resignation. While it has been a subject of discussion, this time my resignation has been accepted."
She said she felt "a deep sense of responsibility for the people we have hurt."
"I want to reiterate how sorry I am for what we now know to have taken place," she added.
That appeared an acknowledgement that the News of the World's invasions of private voicemails went well beyond those of the royal aides whose complaints led to the jailing of a reporter and an investigator in 2007. Police say they are now probing whether another 4,000 people -- including victims of notorious crimes, bombings and war -- were targeted.
Tom Watson, a Labour MP who has led the campaign against the News International papers, said Brooks' departure could put James Murdoch, his father's heir apparent, in the spotlight.
"Because she has taken so long to go I think the focus will very swiftly move on to James Murdoch now and what he knew and what he was involved in," Watson told Sky News.
Professor Martin Innes, a leading criminologist based at Cardiff University, said Brooks would certainly be questioned by police.
"In terms of managing the whole furore around it, if you actually went to an arrest phase, that will ramp up the story yet again and increases the pressure on the investigation," he told Reuters.
"So I would imagine the next step she will be viewed as a witness and they will want to go and talk to some other people as well to try and look at how does her account relate to things that other people say."
A week ago, Brooks had told News of the World staff, who were sacked with the paper's closure, that she would remain to try and resolve the company's problems -- causing anger among many of the 200 being laid off. Some accused Murdoch of sacrificing their jobs to save hers.
Mockridge, who will replace Brooks, has spent two decades in News Corp. Analysts may be pleased at the New Zealander's background in television, an area in which News Corp is keen to expand, as well as his lack of direct involvement in the scandal-hit British newspaper business during the past decade.
Prime Minister Cameron welcomed Brooks' resignation. Cameron often socialised with Brooks and her husband in their country homes, but has sought to distance himself from her as the scandal tarnished his image. His judgment has also been in question for hiring her successor at News of the World as his spokesman. Andy Coulson was arrested last week in the affair.
As well as its published apology this weekend, the company would also write to its commercial partners to update them on its actions, James Murdoch said. Many advertisers had said they would boycott the News of the World before the company killed it off and refused paid advertising in last Sunday's final edition.
Some advertisers had also questioned their spending in other titles, notably the Sun, Britain's best-selling newspaper.
"The Company has made mistakes," James Murdoch wrote to staff. "It is not only receiving appropriate scrutiny, but is also responding to unfair attacks by setting the record straight." Analysts welcomed the tone.
"It is obvious that the company is finally listening fully to the political noise around it and is finally taking seriously the issues that have emerged around alleged offences at News International," said Claire Enders, head of Enders Analysis Media Consultancy.
"Finally the company recognises that whatever the underlying evidence in fact may well be, there has to be a new approach," she added.
News Corp declined to comment on Brooks's severance package, but analysts said it is expected to include a confidentiality clause -- although she does still plan to give evidence to the parliamentary committee next Tuesday.
Jennifer McDermott, a partner with law firm Withers and veteran media lawyer, said: "They can't say she can't talk to committees and things because she's doing that on oath. Confidentiality agreements can only bind people so far.