End of the World

In a fittingly sensational finale, the 168-year-old paper the News of the World will print its last edition on Sunday after claims that it hacked the phones of a murdered girl and the families of dead soldiers.

"Having consulted senior colleagues, I have decided that we must take further decisive action with respect to the paper," said Murdoch's son James, chairman of News International, the British newspaper wing of Rupert Murdoch's News Corp.

"This Sunday will be the last issue of the News of the World," he added.

The final edition would be free of advertising and proceeds would go "to causes and charities that wish to expose their good works to our millions of readers", he said in a statement.

CLOSURE SPARKS SPECULATION

Its closure sparked immediate speculation that Rupert Murdoch was offering the paper as a sacrificial victim to save his bid for control of pay-TV giant BSkyB, which is the subject of an upcoming government decision.

The BBC quoted sources as saying Murdoch would replace it with a Sunday version of The Sun, his daily tabloid, which is Britain's biggest selling newspaper.

Prime Minister David Cameron -- who had himself faced pressure for his ties to Murdoch -- said the closure of the News of the World should not distract from an ongoing police investigation into the hacking.

"What matters is that all wrongdoing is exposed and those responsible for these appalling acts are brought to justice," Cameron's Downing Street office said in a statement.

He repeated his pledge to hold public inquiries into practices at the News of the World and into an earlier botched police probe into the issue.

MURDOCHS BEHIND BROOKS

Cameron's former media chief Andy Coulson was editor of the tabloid at the time of much of the hacking, while the premier has faced scrutiny for his friendship with Rebekah Brooks, News International's chief executive.

James Murdoch repeated his father's earlier defence of Brooks, saying he was confident she was not aware of hacking during her own stint as editor.

"I am satisfied that Rebekah, her leadership of this business and her standard of ethics and her standard of conduct throughout her career, are very good," Murdoch said in a television interview.

ANGER OF BEWILDERED STAFF

Staff at the News of the World's offices reacted with shock and anger at Rupert Murdoch's decision to close the 168-year-old tabloid.

As they emerged from the flat-roofed brick entrance to the News International compound in Wapping, east London, staff at the Sunday paper said they were still reeling from the shock announcement earlier in the day.

Many said they felt they were carrying the can for crimes committed before they worked there.

David Wooding, the paper's Associate Editor, said the staff had been "sickened to the core" by the revelations that a private investigator working for the paper had hacked the phones of a murdered teenage girl, dead soldiers' families, celebrities, politicians and royals.

"Now, like them, we have been caught up in this awful mess (created) by people who worked for our paper many years ago," Wooding said.

"Like many of us who have been told we'll be out of work today, I didn't work for the News of the World when all this happened.

"I came here because it had a great, dynamic professional team.

'PEOPLE WHO CREATED DAMAGE LEFT 5 YEARS AGO'

"I came here to a very clean outfit. The people who created all this damage left five years ago," he told Sky News.

"The phone hacking that resulted in two people being jailed, I thought that was the end of it."

Wooding added: "People who worked on the News of the World at that time used the services of an unscrupulous private detective called Glenn Mulcaire. Among other things he did, he got caught."

Mulcaire and the paper's then royal correspondent Clive Goodman were jailed in 2007 for hacking the phones of celebrities and royals.

It only emerged this week that Mulcaire had also hacked the voicemail of Milly Dowler, a 13-year-old girl who disappeared in 2002. She was later found murdered.

Other employees emerging from the site where the Sun, the Times and the Sunday Times are also produced said the shock at the decision to shut down the paper, and leave 200 staff without jobs, was palpable.

One man said he felt "frankly terrible" as he left the site, while a Sunday Times employee added: "It's a pretty tense atmosphere in there.

"There are a lot of people worried."

Dan Wootton, the paper's showbusiness correspondent, said there had been disbelief at the announcement to staff that the paper would close.

"We weren't hacking phones, we were producing award-winning journalism," he told BBC TV.

On Thursday, London's Metropolitan Police said it was seeking to contact 4,000 possible targets of hacking named in documents seized as part of the investigation into the News of the World.

EX-UK PM AIDE TO BE ARRESTED

British Prime Minister David Cameron's former press aide is to be arrested over the phone-hacking crisis which has plunged Rupert Murdoch's media empire into chaos, the Guardian reports.

Police told Andy Coulson that he was to be detained on Friday over claims that he knew News of the World journalists and private detectives on the paper's payroll were hacking phones of public figures while he was editor, the Guardian said.

According to the report, Coulson has been asked to report to police for questioning, after which he was expected to be released on bail.

News of the imminent arrest broke hours after mogul Murdoch killed off the News of the World in a shock move aimed at limiting the damage caused by the snowballing crisis to his News International stable.

Officers working on Operation Weeting brought forward the arrest over fears News International was to leak more evidence to the press following Tuesday's revelations that Coulson had apparently authorised payments to police for stories.

Coulson became the paper's editor in 2003 but resigned in 2007 after royal editor Clive Goodman and private investigator Glenn Mulcaire were jailed for hacking phones belonging to members of the royal household.

Coulson was hired by then opposition leader Cameron as a media aide and became the coalition government's communications chief following their election victory in 2010.

The former editor resigned in January this year, saying sustained speculation over his time at the News of the World was detracting from his work.