Phone hacking: Rupert Murdoch flies in
News Corporation boss Rupert Murdoch is expected to fly into London today to confront the growing crisis at his media group.
The chairman's reported intervention comes as a third man was held last night in connection with alleged corrupt payments made to police officers.
The 63-year-old was arrested at an address in Surrey as former News of the World editor Andy Coulson was released on police bail after being quizzed for nine hours over allegations of corruption and the phone hacking scandal that forced the closure of the 168-year-old newspaper.
The Sunday tabloid's ex-royal editor Clive Goodman was also questioned at a separate police station over claims officers were bribed.
As the crisis at Mr Murdoch's empire deepened, News International's embattled chief executive Rebekah Brooks hinted to staff that more revelations were ahead, warning of "another very difficult moment in this company's history".
As Mr Coulson, 43, of Forest Hill, south-east London, left Lewisham police station yesterday, he said: "There is an awful lot I would like to say, but I can't at this time."
Both he and Mr Goodman, 53, who was arrested in a dawn swoop on his Surrey home, were released on police bail until October.
Meanwhile, Ms Brooks, who yesterday confirmed in a letter to News International employees that she is not in charge of the company's investigation into alleged phone hacking, met with News of the World staff and defended her decision not to resign.
In a recording leaked to Sky News, she said she wanted to "fight and get this paper's reputation back".
Ms Brooks alleged that her voicemail was one of the most frequently accessed by private investigator Glenn Mulcaire, who was jailed in January 2007 for hacking into royal voicemail.
Appearing to suggest further damaging allegations were still to come, she said: "We have more visibility perhaps on what we can see coming our way than you guys can, and look I can only, I'm tied because of the criminal investigation in what I can say, but I think in a year's time every single one of you in this room might come up and say, 'OK, well I see what you saw now'."
Ms Brooks added: "Eventually it will come out why things went wrong and who was responsible and that will be another very difficult moment in this company's history."
News International last night denied claims that police are investigating suspected deletion of emails by an executive at the company.
The Guardian reported that Scotland Yard was probing claims that a member of staff deleted "millions of emails" from an internal archive on two occasions at the end of January.
Scotland Yard refused to comment on the allegations, and a News International spokeswoman said: "This assertion is rubbish. We adopted a documented email retention policy in line with our US parent's records management policy. We are co-operating actively with police and have not destroyed evidence."
David Cameron pledged "no stone would be left unturned" as he announced details of two inquiries into the phone hacking scandal.
The first, to be led by a judge, will investigate the criminal allegations levelled at News of the World staff as well as looking at whether other newspapers are implicated.
It will also examine the failures of the 2006 Scotland Yard investigation into the practice, which he branded "plainly inadequate".
The second inquiry, expected to begin this summer, will focus on the ethics and practices of the British press and will be conducted by a "credible panel of figures" drawn from a range of different backgrounds.
The Prime Minister said the Press Complaints Commission had "failed" and was "frankly, completely absent" in the phone-hacking scandal.
He will order the inquiry to come up with a series of recommendations for industry regulation, which will be operated completely independently of the press.
In a hastily-convened convened press conference at No 10, Mr Cameron was forced to defend his decision to repeatedly back his former director of communications Mr Coulson even though he had resigned from his newspaper over the phone hacking scandal and continued to be dogged by further allegations.
Mr Coulson resigned from his Downing Street post in January, saying the drip-drip of claims about illegal eavesdropping under his editorship was making his job impossible.
The Prime Minister explained his reasons for giving Mr Coulson a "second chance" and said he took "full responsibility" for the appointment but insisted he had commissioned a firm to carry out a background check beforehand.
The shock decision to close the News of the World was announced after advertisers deserted in droves over claims that murdered schoolgirl Milly Dowler, bereaved military families and relatives of 7/7 bombing victims were targeted by hackers working for the tabloid.
Amid widespread public anger, police chiefs revealed that 4,000 people might have fallen victim and that evidence indicated journalists had paid officers.
Labour leader Ed Miliband claimed Mr Cameron's aides were handed a wealth of information warning them about practices Mr Coulson was involved in while editor of the News of the World.
He said: "Putting it right for the Prime Minister means starting by admitting the appalling error of judgment he made in hiring Andy Coulson, apologising for bringing him into the centre of the Government machine, coming clean about what conversations he had with Andy Coulson, before and after his appointment, about phone hacking."
Meanwhile, more than £1 billion was wiped from BSkyB's market value yesterday amid speculation that the News of the World phone-hacking scandal could scupper Rupert Murdoch's bid to take full control of the satellite broadcaster.