First sort out the mess, Cameron tells Murdoch
Making a statement in the House of Commons, Cameron termed the phone-hacking scandal as a "massive firestorm".
He announced the setting up of a judge-led inquiry to go into the scandal and make recommendations about the relationships among the press, politicians and police.
Cameron said the inquiry, led by Lord Justice Brian Leveson, would have the authority to summon "newspaper reporters, management, proprietors, policemen and politicians of all parties to give evidence under oath and in public."
The inquiry would report in one year, he said.
"What has happened at this company (News International of Murdoch) is disgraceful – it`s got to be addressed at every level… I would say that the company has to first sort out the mess before thinking of corporate expansion or takeover," he said.
A Labour-sponsored motion asking Murdoch to withdraw the takeover bid for BSkyB will be put to motion in the House later in the day.
Cameron said the House should send a message to Murdoch`s company to "clean its stables."
The motion may not reach the voting stage since there is cross-party support for the measure that marks a new low, if not a break, in the hitherto close relationship between Murdoch and politicians.
Given the public revulsion generated by the illegal news-gathering practices of the titles owned by Murdoch`s News International, it is unlikely that the takeover bid for BSkyB will be approved.
A significant agreement reached between Cameron and Ed Miliband, leader of the opposition, is that henceforth all meetings with newspaper editors and senior executives of newspaper organisations will be put on record, and published quarterly.
Cameron admitted that so far politicians did not do enough to take up unethical practices in news organisations because of the "too cosy" relationship.
He said: "Your bins are gone through by some media organisations but you hold back from dealing with it because you want good relations with the media."
Cameron said that those involved in illegal news-gathering practices should not only be brought to justice, but also prevented from running any media company in the country.
He indicated that the bid to take over BSkyB cannot be allowed to go through. "In my view, this business should not be focused on mergers and takeovers, but on clearing up the mess and getting their house in order."
In a sign that the government may go further than disallowing the takeover bid, Cameron said a firm that adopted illegal practices should not be allowed to run any media company in Britain.
He said: "The people involved, whether they were directly responsible for the wrongdoing, sanctioned it, or covered it up, however high or low they go, must not only be brought to justice, they must also have no future role in the running of a media company in our country."