Lord Justice Leveson, the judge who prosecuted serial killer Rose West, has been asked by Prime Minister David Cameron to run his investigation into phone hacking at the Royal Courts of Justice.
The Murdochs are expected to be called to give evidence, as well as former News of the World editors Andy Coulson and Rebekah Brooks.
The wide-ranging probe is also likely to result in Cameron and other senior political figures being questioned about their connections to News International, publisher of the now-defunct News of the World.
Cameron may face some uncomfortable questions about the decision to hire Coulson as his communications chief, particularly after details recently emerged of alleged payments made to Coulson by News International after he started working for the Conservative Party.
Lord Justice Leveson is thought to want the proceedings, which will be held in the same court as the inquiry into the death of Princess Diana, to be televised live to ensure transparency.
Under the inquiry remit, he has the power to call witnesses to give evidence and then compel them under the Inquiries Act 2005. According to The Daily Telegraph, dozens of letters have already been sent out to potential witnesses asking to them co-operate in the inquiry, with the deadline for submissions being today.
Sources close to the inquiry told the newspaper that Lord Justice Leveson would not be restricted in who he asked to testify, and "will go where the evidence takes him".
Alongside his day in the High Court, James Murdoch is also "likely" to be recalled by the Commons culture, media and sport select committee to clarify potentially misleading evidence he gave to the MPs in July.