Rebekah Brooks, now the chief executive of News International, does not intend to resign (Image: Getty)

Rupert Murdoch has publicly given his backing to the embattled News International chief executive Rebekah Brooks, via a statement in which he condemned damaging phone-hacking allegations against the News of the World.

Confirming what observers had widely expected, the News Corporation chairman said that he believed the company should work through the scandal with Brooks at the helm - despite the fact that some of the most explosive allegations relate to the period in which she was the tabloid's editor.

"Recent allegations of phone hacking and making payments to police with respect to the News of the World are deplorable and unacceptable," Murdoch said.

"I have made clear that our company must fully and proactively cooperate with the police in all investigations and that is exactly what News International has been doing and will continue to do under Rebekah Brooks’ leadership."

The stakes for Rupert Murdoch are high. Murdoch and Brooks have developed a close rapport during the latter's time at News International, News Corp's major British publishing arm. Moreover, Labour MPs are now demanding that the Government find a way to halt News Corp's takeover of the subscription television giant BSkyB due to the latest phone-hacking allegations.

Shortly after his statement was released, The Guardian reported that News International would step up its attempts to protect its chief executive from allegations that the News of the World hacked phones belonging to the murdered schoolgirl Milly Dowler and the families of two other murdered girls when Brooks was the paper's editor in 2002.

The allegations this week generated unprecedented public anger over the phone-hacking scandal, triggering demands for a boycott of the News of the World and compelling a string of companies to announce that they would no longer advertise in the paper.

According to the report, News International will claim that Brooks was on holiday when both incidents supposedly took place: meaning that the then-deputy editor Andy Coulson would officially have been in charge. The attempts to shift attention toward Coulson highlight the increasingly terse relationship between him and his former employer.

But whether News International can ultimately save Brooks remains an open question, given ongoing calls among the public and politicians for her to resign from the helm of the company.

Labour's leader Ed Miliband has stepped up his direct criticism of the Murdoch-owned News International and its chief executive. He told Parliament yesterday that Brooks should step down, dramatically building on his previous calls for her to "consider her position".

Britain's major parties have long attempted to build strong relationships with Murdoch and the editors of his papers, but it is clear that Labour now feels increasingly confident about putting News International under the blowtorch.

Cameron caught in a bind

David Cameron says that there should be at least one inquiry into the scandal, but stopped well short of his Labour counterpart (Image: BBC)

The cloud hanging over both Coulson and Brooks has placed Prime Minister David Cameron in a difficult position.

Coulson left the News of the World in 2007 after one of his reporters was convicted of hacking into phones, but later joined the Conservative leader's office as its PR chief. He became Downing Street's director of communications after last May's election, a post he held until his hacking-related resignation in January.

Labour MPs describe Cameron's hiring of Coulson as a major error of judgement and have demanded to know what vetting procedures took place before the former News of the World editor assumed his position as the Tories' top spin doctor.

Compounding that issue is the fact that Cameron forged a close friendship with Brooks and her husband Charlie. The spectre of that friendship came to haunt the prime minister in Parliament yesterday, when he stonewalled in response to Miliband's demand that Brooks step down.

Cameron has backed a public inquiry into media practices in general, but said that an inquiry into why the Metropolitan Police's original investigation into News of the World phone hacking failed so spectacularly would have to wait until Operation Weeting, the current police probe, concluded.

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