News of the World hacking scandal moves to UK court

By Georgina Prodhan

LONDON (Reuters) - An attempt by Rupert Murdoch to draw a line under an escalating phone-hacking scandal looked set to fail on Friday with a host of lawyers going to court to join forces against his British newspaper publishing arm.

An investigation into newsgathering practices at the News of the World tabloid has so far touched public figures from actress Sienna Miller to British Prime Minister David Cameron.

It has also cast a shadow over a planned deal by parent company News Corp for a $14 billion buyout of British pay-TV group BSkyB, with critics saying the government should put it on hold until the hacking investigation is over.

News International's News of the World tabloid sells almost 3 million copies every Sunday -- more than any of its rivals -- fueled by front-page tales of celebrity scandal.

But a week ago the company admitted that some of those stories may have come from hacking private phone messages and accepted liability for the first time. News International apologized to eight people including Miller and British politician Tessa Jowell who are suing the company and said it would establish a compensation scheme.

But on Friday lawyers launched a case-management conference to decide how best to manage the claims -- which may have affected thousands of people -- suggesting the scandal is unlikely to die down soon.

REPORTERS ARRESTED

For years, News International had maintained that phone hacking at the tabloid was limited to a few rogue individuals.

Its royal editor and a private investigator were jailed in 2007 for hacking into voicemail messages of aides to Britain's royal family. Editor Andy Coulson resigned, saying he took ultimate responsibility but had not known about the practice.

Coulson later became the prime minister's spokesman, but resigned from that post as a new police investigation gathered steam.

Police reopened their investigation at the start of this year after a dogged campaign by left-wing newspaper The Guardian. Three other senior News of the World reporters have since been arrested, including one on Thursday.

Law firm Mishcon de Reya, which is acting for several of the claimants, says it has received an unprecedented number of enquiries since News International published its statement, and estimates there could be more than 6,000 potential claimants.

Protesters opposed to the BSkyB takeover were also planning to demonstrate outside the London court on Friday.

Opposition has been building to the planned deal, which critics fear would increase News Corp's influence over British media by adding 24-hour TV news channel Sky News to a stable that includes the Times of London and third-party radio news.

Several of News International and BSkyB's rivals including The Guardian and telecoms group BT have joined forces to campaign against the takeover.

The government is expected to approve the deal in the coming weeks, which it has said should be decided on grounds of media plurality and not linked to the phone-hacking scandal.

It could refer the matter for further investigation by competition authorities but has signaled it is unlikely to do so, and has already accepted remedies proposed by News Corp.

(Writing by Georgina Prodhan and Kate Holton; Editing by Chris Wickham and Janet Lawrence)