Rupert Murdoch was advised by his daughter Elisabeth that her brother James should stand down from his senior role at News Corp earlier this year because of the mishandling of the phone-hacking scandal, the magazine 'Vanity Fair' claims.
Both Elisabeth and Mr Murdoch senior separately suggested to James, pictured, that he should "take a leave", only for Rupert Murdoch to "change his mind" following a "sleepless night", the magazine claims.
The story is based on information supplied by News Corp insiders and sources close to the Murdoch family.
It states Elisabeth Murdoch declined to take her seat on the board because lawyers and her husband, PR guru Matthew Freud, advised her not to.
'Vanity Fair' suggests eldest son Lachlan could become chairman; James chief executive; and sisters Elisabeth and Prudence may stand aside.