Prime Minister David Cameron was on Friday thrust right into the centre of the News of the World phone-hacking scandal as his former communications chief, Andy Coulson, was arrested in connection with police investigations into the case.
He was Editor of the paper during the period to which some of the allegations relate. He resigned in 2007 when its then royal correspondent, Clive Goodman, was jailed for his role in hacking phones of members of the royal family.
Mr. Coulson, who has denied any knowledge of illegal practices by NoW journalists under his watch, was hired by Mr. Cameron to head the Conservative party's media operation. He brought him into Downing Street after becoming Prime Minister last year ignoring warnings about his controversial past.
Mr. Coulson (43) quit in January this year as fresh revelations about NoW's allegedly illegal news-gathering tactics emerged, prompting calls for his resignation.
On Friday, Mr. Cameron defended his decision to hire Mr. Coulson and described him as a “friend”.
“I became friends with him and I think he did his job for me in a very effective way. He became a friend and he is a friend,” he said.
He also announced two inquiries — one to be led by a judge — into the scandal which has shaken Rupert Murdoch's media group to its roots and threatens his bid for the takeover of the satellite broadcaster BskyB.
Breaking his silence over calls for the resignation of Rebekah Brooks, chief executive of News International which publishes NoW, the Prime Minister said there had been reports that that she had offered to resign “In this situation I would have taken it,” he said.
Ms. Brooks, who was Editor of NoW when the alleged hacking took place, is a personal friend of Mr. Cameron's and until now he had refused to comment on her position. Mr. Coulson's arrest came hours after Mr. Murdoch, in a surprise move, announced that he was shutting down NoW and that the forthcoming Sunday issue of the 168-year-old newspaper would be its last.
James Murdoch, chairman of News International which also publishes The Times and the Sun said its behaviour had “sullied” the reputation of the organisation.
“The NoW is in the business of holding others to account. But it failed when it came to itself,” he said amid a growing public backlash which saw several high-profile advertisers pull their accounts while shares in its parent company fell and thousands of readers signed up to online boycott campaigns.
Staff at NoW said they were inundated with calls from angry readers following revelations that a detective hired by the paper hacked the phone of families of the victims of the London 2005 bombings.
There was speculation that Mr. Murdoch was already planning to launch another Sunday tabloid to replace NoW which had been Britain's best-selling newspaper and known as a “cash cow” of the Murdoch group.