After new documents released yesterday indicated that Rupert Murdoch's UK newspaper publisher knew three years ago that phone hacking at the News of the World went beyond a single "rogue reporter", chairman James Murdoch's position has been described as "untenable".
Murdoch is due to appear before the Commons culture, media and sport select committee on November 10 to give more evidence on hacking and clarify statements he made to the MPs in July.
Last night, it emerged that a lawyer working for News International had cautioned that it would be "extremely damaging" to the firm's reputation if information had been made public about a legal case brought by phone hacking victim Gordon Taylor, the boss of the Professional Footballers' Association, in April 2008.
The case is thought to have occurred after Taylor's legal team uncovered an email sent by a News of the World journalist containing a transcript of messages left on Taylor's phone.
News International's former legal advisors Farrer & Co handed over the warning to the culture committee, which is investigating phone hacking at the News of the World.
It was contained in a legal opinion prepared by Michael Silverleaf QC, the group's counsel, on June 3, 2008 for the News of the World's legal officer Tom Crone.
The lawyer mentioned Greg Miskiw, a former news editor at the now defunct News of the World, and Ross Hindley, a reporter, as being "intimately involved". A third name was redacted.
Another document released by Farrer & Co, dated June 2008, warned that Taylor wanted to show that illegal practices were "rife" at the News of the World, contrary to News International's public statements to parliament. All the documents were published on the culture committee website.
> News of the World hacking more widespread, says lawyer
Murdoch is facing questions over his knowledge of a key email pertaining to the Taylor case. The email, marked "for Neville", is understood to have been intended for the News of the World's chief reporter Neville Thurlbeck, suggesting that phone hacking practices at the Sunday tabloid extended well beyond just former royal reporter Clive Goodman, who was jailed for the offence in 2007.
Culture committee chairman John Whittingdale opted to recall Murdoch after his claim in July that he was unaware of the "for Neville" email when he signed off the Taylor payment - totalling nearly £700,000 - was contradicted by Crone and the paper's former editor Colin Myler.
News International insisted yesterday that Murdoch had not seen the opinion.
But Whittingdale said: "This contradicts the evidence given to us previously and we shall be asking about this when James Murdoch comes before the committee."
The Independent's editor Chris Blackhurst told Sky News last night that Murdoch's position as News International's chairman is now "untenable" after the latest phone hacking revelations.
"I think his (James Murdoch's) position is untenable, but then I have thought this for a while and he's still there," he added.