News Corp. says it will close its 168-year-old U.K. tabloid News of the World, a dramatic bid to cap a scandal centered on the paper's controversial reporting tactics in pursuit of racy scoops. 
 
 News Of The World was known for years of hard-hitting investigations, exposure of wrongdoing, campaigning - and a hefty dose of celebrity gossip. Video courtesy of Sky News. 
 
 The paper, which appears on Sundays, is accused of improperly intercepting voice mails of everyday people, including a 13-year-old murder victim, as well as those of celebrities. 
 
 James Murdoch, News Corp.'s deputy chief operating officer, told staff Thursday that News Corp. had decided to close the tabloid because the allegations—if true—were "inhuman" and had no place in the company. He said the paper's reputation had been "sullied by behavior that was wrong." 
 
 The paper is one of Britain's sauciest and most storied tabloids, and was a key building block in the global media empire created by News Corp. Chairman and Chief Executive Rupert Murdoch, who purchased it in 1969. News Corp. also owns The Wall Street Journal. 
 
 News of the World became the U.K.'s best-selling Sunday paper with a righteous, no-holds-barred approach to taking down the rich and famous, from politicians to soccer stars. That style both appealed to the U.K.'s working class and titillated sophisticates who bought it as a guilty pleasure. 
 
 View Slideshow Agence France-Presse/Getty Images Chief executive of News International, Rebekah Brooks. 
 
 The paper has been under immense pressure for five years amid investigations into the use of private detectives to break into the mobile-phone voice mail of celebrities and political leaders. 
 
 The public rebuke reached a new level this week with the allegation that, in 2002, the paper accessed the voice mail of an abducted 13-year-old girl who, it turned out, had been murdered. Other allegations then surfaced of hacking into phones tied to other child-murder victims, as well as the families of war dead and of victims of 2005 terrorist attacks in London. 
 
 A person familiar with the matter said James Murdoch proposed the closure to his father earlier this week, and the idea was pursued immediately. 
 
 "The News of the World is in the business of holding others to account," the younger Mr. Murdoch said. "But it failed when it came to itself." He said the final News of the World would be published Sunday. 
 
 The controversy thrusts the younger Mr. Murdoch, believed to be a contender to eventually run News Corp., to the front and center of crisis management. 
 
 A sense that the paper had betrayed its readership was evident in London on Thursday night. Kandice Kameka, an office manager who works near the paper's offices, said she bought the paper "depending on what was on the front page—how good the gossip was." But she added: "When I found out about the tapping with the murder victim I was just gobsmacked—I didn't want anything to do with it after that....They just have no respect for people." 
 
 News of the World, Through the Years View Slideshow Getty Images A printer studied a front page proof in 1953. View Graphics Read All About It Key dates in the paper's past View Graphics 
 
 The recent uproar has threatened one of the most important business transactions on News Corp.'s plate, its proposed buyout of the 60.9% of British Sky Broadcasting Group PLC that it doesn't already own. 
 
 Before this week, the company was poised to finally receive regulatory approval for that proposal after an arduous 13-month effort; now that approval may be delayed, and it is unclear whether the deal itself will wind up as collateral damage in the News of the World scandal. 
 
 Analysts said the closure of News of the World would have a trivial impact on News Corp.'s finances. The paper accounts for significantly less than half of News Corp.'s U.K. publishing operations, which are valued at about $1.3 billion, or 2.8% of News Corp.'s current market cap, according to a person familiar with the matter. News Corp. shares rose almost 2% on the Nasdaq Stock Market Thursday before finishing at $17.43, down four cents. 
 
 Closing the paper by no means will shut down the scandal that has engulfed News Corp.'s U.K. newspaper operations. The company still faces a thicket of criminal investigations, civil lawsuits and new government and police probes that could take years to run their course. 
 
 News Corp. said it would close its News of the World weekly tabloid after a phone-hacking scandal, with this coming Sunday's edition the newspaper's last. 
 
 Executives of News Corp. believe more arrests are likely, according to people familiar with the matter. On Thursday night, the Guardian newspaper said Andy Coulson—a former News of the World editor who later became an aide to Prime Minister David Cameron—was told by police to present himself for arrest on Friday on suspicion of offenses related to phone hacking during his time as editor. Mr. Coulson didn't respond to a request for comment. 
 
 The situation has led to calls for the resignation of Rebekah Brooks, the chief executive of News International, News Corp.'s U.K. newspaper unit, who so far has received the backing of the elder Mr. Murdoch as well as his son. 
 
 Ms. Brooks was News of the World's editor until 2003, during the time of the alleged hacking of the murdered girl's phone. Since then, she has become one of the elder Mr. Murdoch's top lieutenants. 
 
 The latest revelations unleashed a political storm that prompted Mr. Cameron—a friend of Ms. Brooks—to call for new investigations into the paper's reporting tactics, the failures of the police and British media practices in general. Late Thursday, Downing Street officials were quick to say Mr. Cameron had nothing to do with the move to shut the paper. 
 
 Ed Miliband, the leader of the opposition Labour Party, said that Ms. Brooks should still step down. "I don't think News International can hope to start moving on and deal with these issues while she remains in place," he said. 
 
 Ms. Brooks declined to comment through a spokeswoman. 
 
 News Corp.'s move to close News of the World—which has an average circulation of 2.7 million, according to tracking organization ABC—brought sharp criticism from the U.K.'s National Union of Journalists. It is one of News Corp.'s four major U.K. newspaper titles, the others being the Sun, the Times and Sunday Times, but its circulation has been declining in recent years. 
 
 Michelle Stanistreet, the union's deputy general secretary, said a handful of staffers from the tabloid's sister paper, the Sun, left work in solidarity with their News of the World colleagues on Thursday, but that no strikes were planned. She said the closure was an attempt to divert attention, and the younger Mr. Murdoch should have fired Ms. Brooks instead. 
 
 News International said Thursday that some of the paper's 200 staff members may be laid off. But some may be transferred to other titles. 
 
 News Corp. may not be without a Sunday tabloid in the U.K. for long: people familiar with the matter said it has considered adding a Sunday edition to the six-days-a-week Sun, which attracts a similar audience as News of the World. The company could also simply launch a new paper with a different name. 
 
 "We don't know if this is anything more than a bit of PR management," said Tamsin Allen, a partner at law firm Bindmans LLP representing alleged phone-hack victims. "It's not really until we see heads rolling that we can be convinced that the company is taking this sufficiently seriously." 
 
 The phone-hacking scandal dates back to 2005, when Prince William's staff first alerted authorities to the possibility that the News of the World had hacked phones connected to the prince, sparking a police inquiry. 
 
 An initial police investigation into the newspaper resulted in two successful prosecutions that led to prison terms for the paper's royal-family correspondent, Clive Goodman, and Glenn Mulcaire, a private investigator hired by the tabloid. 
 
 Mr. Coulson, News of the World's editor at the time, resigned from his post in 2007, saying he took responsibility for the hacking that occurred on his watch but stating that he didn't know about it. The scandal reignited after new information surfaced in civil suits and the police reopened their criminal investigation. 
 
 —Alistair MacDonald, Natalia Rachlin and Jessica E. Vascellaro contributed to this article. 
 
 Write to Paul Sonne at paul.sonne@wsj.com, Cassell Bryan-Low at cassell.bryan-low@wsj.com and Russell Adams at russell.adams@wsj.com ||||| News Corp. (NWSA)’s Rupert Murdoch, who’s been asked to testify in front of U.K. lawmakers, is facing at least six investigations stemming from a phone-hacking scandal and his bid to buy all of British Sky Broadcasting Group Plc. (BSY) 
 
 Murdoch may be in the spotlight on July 19 as he’s called to answer questions from the Parliament’s committee on Culture, Media and Sport about prior evidence that News Corp.’s British newspaper unit, News International, had paid police to get stories. The News Corp. Chief Executive Officer’s son, James, and the unit’s CEO Rebekah Brooks were also summoned to testify. News International said they will cooperate. 
 
 John Whittingdale, the committee’s chairman, told Sky News yesterday News International needs to answer questions about who knew of the crimes and when. 
 
 “The police inquiry is the most important thing and will lead to criminal charges against some people,” Whittingdale said. “Part of the problem with this saga is that everyday has brought a new revelation. I’ve given up being surprised.” 
 
 Rupert Murdoch arrived in London on July 10 to deal with a flurry of allegations that reporters at the now-defunct News of the World tabloid hacked into hundreds of mobile-phone voice mails, including those of murder and terror victims, and bribed police for confidential information. The scandal prompted Murdoch to close the 168-year old tabloid. 
 
 “They have misled parliament egregiously over time, they have misled the country, they’ve misled their readers and it’s incumbent,” on parliament to get the facts, Tom Watson, a member of the committee, told BBC Radio 4 yesterday. “We will be sitting next Tuesday and we expect them to be there.” 
 
 Police, Cameron 
 
 London’s Metropolitan Police are investigating, and Prime Minister David Cameron called for two other inquiries into why an initial police phone-hacking probe failed, how widespread the hacking was, and whether it also occurred at other newspapers. 
 
 The current police probe was opened in January after new information surfaced as the result of civil lawsuits filed by celebrities including actress Sienna Miller against the tabloid. Police opened a second investigation last week into police bribes. Meanwhile, communications regulator Ofcom and the U.K. Competition Commission are reviewing the proposed BSkyB deal. 
 
 Two watchdog groups, Media Matters for America and Citizens for Responsibility and Ethics have called for U.S. lawmakers to investigate if journalists working for News Corp. hacked the voice mails of Americans. 
 
 Photographer: Leon Neal/AFP/Getty Images Rebekah Brooks, chief executive officer of News International Ltd. Close Rebekah Brooks, chief executive officer of News International Ltd. Close Open Photographer: Leon Neal/AFP/Getty Images Rebekah Brooks, chief executive officer of News International Ltd. 
 
 9/11 Victims 
 
 Senator Jay Rockefeller, a Democrat from West Virginia, called for U.S. agencies to investigate whether alleged phone hacking at News Corp.’s U.K. newspapers targeted American victims of the Sept. 11, 2001, terrorist attacks. 
 
 “I am concerned that the admitted phone hacking in London by the News Corp. may have extended to 9/11 victims or other Americans,” Rockefeller, said yesterday in a statement posted on the website of the Senate Commerce, Science and Transportation Committee, which he chairs. “If they did, the consequences will be severe.” 
 
 News International is assisting the Metropolitan Police in their investigation, Brooks said in a July 8 memo to staff. Joel Klein, who heads News Corp.’s education unit, is leading and directing the company’s overall handling of the matter, Brooks said. Klein, the former chancellor of New York City schools, was also the head of the U.S. Justice Department’s antitrust division. 
 
 Brooks said in the memo that News Corp. isn’t conducting its own investigation. 
 
 Damage Limitation 
 
 “One of the real challenges for the company will be dealing with all of these inquiries running in parallel with overlapping goals,” Nick Benwell, the head of the crime, fraud and investigations group at Simmons & Simmons in London, said in an interview yesterday. “They’ll be very keen to limit the damage and keep it to a News of the World issue.” 
 
 Photographer: Chris Ratcliffe/Bloomberg News Corp.'s chairman for Europe and Asia James Murdoch arrives at the offices of News International in London. Close News Corp.'s chairman for Europe and Asia James Murdoch arrives at the offices of News... Read More Close Open Photographer: Chris Ratcliffe/Bloomberg News Corp.'s chairman for Europe and Asia James Murdoch arrives at the offices of News International in London. 
 
 Miranda Higham, a spokeswoman for New York-based News Corp., declined to comment on the scope and expense of the probes or any distraction they may cause management. Murdoch, his son and Brooks aren’t required to appear at the parliamentary hearing. 
 
 “They are damned if they do and damned if they don’t,” said Niri Shan, the head of media law at Taylor Wessing LLP. “If they don’t appear it looks like they have got something to hide. If they do, whatever they say is going to lead to growing scrutiny of the issue.” 
 
 ‘Lack of Cooperation’ 
 
 Murdoch avoided an in-depth probe into the tactics of reporters at the paper for years after its former royal reporter, Clive Goodman, and private investigator Glenn Mulcaire were jailed in 2007 for tapping phones of members of the royal family. The police closed an investigation in December, citing a lack of evidence. 
 
 News International blocked an earlier police inquiry into phone hacking by its “complete lack of cooperation” and “lies,” Peter Clarke, former deputy assistant commissioner of the Metropolitan Police, told lawmakers on Parliament’s Home Affairs Committee yesterday. 
 
 “This is a global organization with access to the best legal advice in my view deliberately trying to thwart a criminal investigation,” Clarke said as he tried to explain why police between 2006 and 2010 refused to extend their investigation into illegal activities by journalists at the News of the World. “I was certain as could be that they had something to hide.” 
 
 Former Prime Minister Gordon Brown yesterday accused Murdoch’s newspapers of using criminals to get stories about him while he was in office and said he was reduced to tears when the Sun tabloid phoned him to say its reporters obtained his son’s medical records showing he was diagnosed with cystic fibrosis. 
 
 BSkyB Bid 
 
 News Corp. said it didn’t access the medical records of Brown’s son nor did it commission anyone to do so. The story came from a member of the public whose family also experienced cystic fibrosis, the company said in an e-mailed statement. 
 
 The phone hacking revelations have overwhelmed the company’s BSkyB bid. News Corp. on July 11 rescinded its offer to spin off Sky News as part of the BSkyB buyout, pushing U.K. Culture Secretary Jeremy Hunt to refer the bid to the Competition Commission for a review. 
 
 BSkyB shares declined 1.8 percent to 679.5 pence in London trading as of 11:37 a.m., less than the 700 pence a share offered by News Corp. for the 61 percent it doesn’t already own. 
 
 Hunt said the latest review, which follows investigations by Ofcom and the Office of Fair Trading, will focus on media plurality, whether the deal would reduce the number of voices. Ofcom, which has the power to revoke BSkyB’s license, can still hold up the deal as it considers whether News Corp. should own BSkyB and said it’s monitoring the police probe. 
 
 BSkyB Vote 
 
 The regulator is likely to wait until the investigation concludes before deciding whether News Corp. is “fit and proper” to own a U.K. broadcaster, said Chris Watson, a telecommunications lawyer at CMS Cameron McKenna in London. 
 
 “In merger control issues, they ought to be quite reluctant for approving the deal,” Watson said. The finality of a decision “requires you to be very hesitant.” 
 
 Cameron joined other politicians pushing for News Corp. to drop the BSkyB bid as the scandal widened and said he would support the opposition Labour Party in a non-binding vote on the issue today. On July 8, he called for a judge-led inquiry and a second review that can begin this summer to “look at how our newspapers are regulated and make recommendations for the future.” 
 
 Chris Goodall, a media analyst at London-based Enders Analysis, said the volume of activity will be difficult for News Corp. to manage. 
 
 “The people who would usually be running the business end up spending a large fraction of their time working on the regulatory and political stuff,” Goodall said. “It’s continuous requests for data.” 
 
 To contact the reporter for this story: Lindsay Fortado in London at lfortado@bloomberg.net; Thomas Penny in London at tpenny@bloomberg.net 
 
 To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.
– Mired in an ever-deepening phone hacking scandal, Rupert Murdoch's 168-year-old News of the World will fold after Sunday's edition, reports the Wall Street Journal. "If recent allegations are true, it was inhuman, and has no place in our company," James Murdoch said in a statement announcing the closure of the vaunted British tabloid. The younger Murdoch said that the paper had now "voluntarily given evidence to police" of widespread wrongdoing, and that "those who acted wrongly will have to face the consequences."