07/07/2011 Newsnight

News International kills off the News of the World, but their chief

executive is alive and kicking with Murdoch's backing. I am satisfied

that Rebekah's leadership of the business and her standard of ethics

and conduct, throughout her career, are very good. I have been speaking

to the Labour leader. What I'm interested in is not closing down

newspapers, I'm interested in those who were responsible being brought

to justice, and those who had responsibility for the running of

that newspaper taking their responsibility. And still they

can't bury the story of hacking and bribery. We hear from a victim of

the 7/7 family about their phone being hacked. We have suffered so

much, why do we have to suffer more. Does Murdoch's empire go below the

water line and is it sinking fast. I'm joined by politician, newspaper

editor, the News of the World's political editor, Rupert Murdoch's

biographer, and Bob Woodward. Up, up and away, tomorrow at the

Kennedy space centre, the very last shuttle is blasting off, we look to

frontiers new. Good evening, the world's biggest-

selling English language Sunday paper has been sacrificed by the

Murdoch empire, in day of high drama, which left 200 employees

bereft of a job. The reason is far from clear, was it simply that the

title is toxic. Was it to save the chief executive, Rebekah Brooks'

skin, or to smooth the passage of the takeover of BSkyB, or to pave

the way for a new Sunday paper, or is Rupert Murdoch at sea for the

first time in his life. Questions remain for David Cameron over the

BSkyB deal, and the relationship between the former direct or of

communications and ex-editor of the News of the World, Andy Coulson,

who, we understand will be arrested tomorrow. First this report.

This is a storm that has engulfed politicians, papers and the police.

After an extraordinary day, it is not clear how far the damage will

go, and ultimately who is going to pay? For David Cameron this is

already the most difficult crisis of his Premiershipship, events are

moving fast and - Premiership, events are moving fast and he can

do little more than wait and see what happens. He used to see his

director of communications as a lucky charm. I thank Andy Coulson

for putting on this march past. Even when Andy Coulson was forced

to resign in January this year, David Cameron refused to cut the

man loose. Andy Coulson resigned from the News of the World when he

found out what happened. I feel he's punished twice for the same

offence. I choose to judge him by the work he has done for me, for

the Government and for the country. As I say, he has run the Downing

Street press office in a professional, competent and good

way. If you compare that with the days of the dodgy dossiers and

Alistair Campbell and Damien McBride, and all that nonsense, we

had from the previous Government, he has done an excellent, excellent

job. This scandal could be every bit as damaging as any of those. Mr

Cameron can't change the past. He did hire Andy Coulson and he is

personal friends with Mr Coulson's predecessor, as editor of the News

of the World, the current chief executive of News International,

Rebekah Brooks. The mood among Conservatives is anger and fear.

Plenty begged David Cameron not to have anything to do with Andy

Coulson. One senior backbencher told Newsnight, this could easily

cost them the next election. It is a bit like John Major and ERM, Tony

Blair and Ecclestone, and even Tony Blair and David Kelly, this is the

moment when that young hopeful leader turns into somebody who's

tarnished. How does he get out of it. I do believe David Cameron does

have moral values, he has to return to those moral values. He has to

apologise for hiring Coulson, to bring such man into Downing Street,

we have to have an apology and an explanation on why he did it. We

have to know about the relationship with Rebekah Brooks, how often they

see each other and what they talk about, and the relationship with

Murdoch, which is kept quiet about for so long. News International

have apparently revealed e-mail that is show that during his time

at News of the World, Andy Coulson authorised huge payments to corrupt

police officers. That would seem to constitute a criminal offence. The

e-mails contradict evidence Mr Coulson gave last December, when he

was a witness in the trial of the Scottish politician, Tommy Sheridan.

Tommy Sheridan, conducting his own Four words that some believe now

require extensive explanation. Today Tommy Sheridan's lawyer and

the spokesman called on the police to investigate. When it was

announced that Andy Coulson had authorised payments to police

officers for information, and in Scotland in December he told a jury

that he had no knowledge of payments to police officers, one of

those, either Andy Coulson or News International, are misleading us.

If it was Andy Coulson, he has to answer a perjury charge, that is

very serious. News International today took the kind of decisive

action simply not available to David Cameron, faced with a scandal

that threatens to infect the whole organisation, Rupert Murdoch has

taken a knife to his own corporate flesh.

An extraordinary moment in British journalism, the News of the World

is to close, victim of its own phone hacking scandal. In closing

the News of the World, he's ending a 168 year title. One of my

colleague is in tears, I have a chap who has just got married and

bought a new house a few weeks ago. There is 200 people up there, I

have to say all the people up there throughout this have held their

heads up high, none of us did any of this, it is all done by people

who have left the organisation. Rebekah Brooks, the editor of the

News of the World, at the time when Milly Dowler's phone was allegedly

hacked, is now chief executive of News International, she hasn't lost

her job, yet, at least. Today, James Murdoch stood resolutely by

her. I'm convinced that Rebekah Brooks' leadership of the company

is the right thing, she's doing the right thing for the company. It is

her leadership that has really gotten to grips with this whole

period in the company's history. And the committees. So no talk of

her going to be clear of that? no, her leadership is crucial right

now. It is actually what has been moving allot of this forward.

Meanwhile, the Metropolitan Police have been forced to revisit the

investigation that they apparently got so badly wrong last time. Was

it just incompetence or complacency or something far more sinister.

Today is the anniversary of 7/7, the families of those who died in

those attacks were also, apparently, targeted by the investigator

working for the News of the World. This, during the tenure of Andy

Coulson at the paper. Sean Cassidy lost his son at the bomb in Russell

Square. It should be an independent inquiry, both the Labour Party and

the Tories should distance themselves from News International.

And an apology for hiring Andy Coulson? Yes, and especially an

apology to people like me, I'm an ordinary citizen going about my

every day work, who unfortunately got caught up in the July 7th

bombings, I don't deserve this or any other family. Do you feel the

Prime Minister is in this, because of his proximity to Andy Coulson,

that he's part of your pain? Yes I think he is, he should know what is

going on. If he hired someone that was already working for News

International. Andy Coulson hid way from the cameras whilst working for

David Cameron. He cannot hide now though from the scandal that is

growing fast, and nor can his former boss.

Joining me now is the editor of the paper who broke the story, Alan

Rusbridger of the Guardian. Is it good news that the News of the

World is closed. No, I think it is baffling, no-one

has called for the News of the World to be closed, as your clip

said, the present staff are not associated with this. In fact James

Murdoch's statement pays tribute to them and says what great journalism

they are doing, it seems perverse to close down the newspaper. If it

was done to save Rebekah Brooks' skin, will it have that effect?

surprising thing about the memo, and first of all, it is welcome

that James Murdoch has finally come out and confessed to everything we

said happened back in July 2009. That is good, but it has this great

gap at the heart of it, which is to just blame everything on one word

"wrong doers", who are they? Either that includes Rebekah Brooks, or

she didn't know what was going on, in which ways she's not very

competent. Is it conceivable, as an editor, that something like as

shocking an event as Milly Dowler's phone allegedly being hacked could

go on without the knowledge of the editor? We now know this was

systematic, this was what went on, it was what they did for every

story. I spoke to a News of the World reporter yesterday who said

every story present today the editor they asked for the messages.

So the editor, Andy Coulson or Rebekah Brooks? This was Coulson.

And most editors find it incredible that you could be editor, and

Rebekah Wade was editor of two papers, and week after week people

coming up with sensational stories and you never ask where they came

from. What do you make of the timing of today, is there something

big coming? They have now a tough investigative team. It may be they

know there is more stuff coming down the slipway. It could be a

commercial decision. It may be they realised the brand was totally

toxic. It seems amazing you keep the chief executive in place and

get rid of the staff and paper. Moving on to something very

important. Tomorrow we understand that Andy Coulson will be arrested.

Now, as an editor, or as a human being, you spoke to a senior

executive of David Cameron's before the election, and said what? There

was this odd situation that we knew that there was this murder trial

coming, which involved one of the investigators that Coulson had used,

who had been in jail for seven years. It seemed reasonable to try

to warn Cameron that he shouldn't, before he took Coulson into Number

Ten Downing Street, he should have some inquiries about this. I'm not

the only figure in Fleet Street who got this warning through to Cameron,

saying beware. Surely David Cameron knew about the warnings? Oh yes.

You also spoke to Nick Clegg before the election what did you say to

him? The same thing, that there is a big murder trial coming,

involving one of the people that Coulson involved. We can't report

at the time, because it is unreportable. But you should just

know about this. Having said this to both Cameron's people and to

Clegg, what message did you get back from both camps? Nick Clegg

didn't think at that time that he would be in Downing Street and

nothing came back from Cameron. I wonder what sort of vetting went on.

A lot of the stuff had been published in the Guardian in 2002.

It was the BBC's crime correspondent who wrote a lot about

this. Cameron was either very naive to accept Coulson's word, or he

just didn't go through the proper vetting processes. We will be

hearing from you again in a little while. Thank you for now. Earlier I

spoke about all this to the Labour leader, Ed Miliband.

Had a matter of moments ago we heard James Murdoch has made a

statement to say after this Sunday the News of the World will be

closing its doors forever. What is your reaction to that? I think it

is a big decision but I don't think it so was the problem. Because

afterall, lots of people are losing their jobs today. But one of the

people who is remain anything her job is the chief executive of News

International, who was the editor at the time that the hacking of

Milly Dowler's phone happened. So it is a big act, but I don't think

it so was the real issues at News International. Is it the right

decision? It is a decision for them, but I don't think it so was a

problem. Is it Mia cull pa? sure - Mea culpa? I'm sure for

those up and down the country they are appalled, the public is

appalled, the hacking of Milly Dowler, over the last few days what

we have seen exposed, it shows the trouble that News International is

in. I'm not interested in closing down newspaper, I'm interested in

those who were responsible for being brought to justice, and those

who had the responsibility for the running of that newspaper, taking

responsibility. I don't think that has happened today. Is it right to

say if Rebekah Brooks stays in her job as far as you are concerned

that is a blight on News International for good? She should

go and take responsibility. Let me explain why I say this. I say this

because anyone who runs an organisation and who imagines

themselves being in a position of the things that happened on her

watch happening would think, even if I didn't know about them,

somebody has to take responsibility for what happened. Frankly, the

idea that she is leading the investigation at News International,

overseeing the investigation, with the police, I think that beggers

belief for members of the public up and down the country. That is why I

have spoken out as I have on it. What do you say to the allegation

that she has been kept in place as a human shield for James Murdoch?

I'm not getting into that, I'm interested in the right thing being

done by way of the public, that is the most important thing in this

whole process. We have a responsibility as political leders

to speak out on these issues as to what we think the right thing to do

is. Weren't you slow off the mark. On Monday night's Newsnight, Tom

Watson said you are as guilty as Clegg and Cameron, of, not only

letting the Dowler family down, but simply not pushing hard enough on

this whole issue, you were run to go catch up? I don't accept what

Tom Watson said. But I do accept this, that we all have lessons to

learn about the need to speak out on these issues. And you know the

history of the Labour Party and News International is that up and

down history, but I think we have all learned a lesson this week.

Should you have spoken out earlier? We all learn a lesson, as I say b

the need to speak out on the issues. What I have done this week is to

leave the debate, as political leaders should. Isn't the very

thing you were saying, that Labour has a problem with News

International, look at 1995, Tony Blair, Alistair Campbell and others

couldn't get to Australia fast enough to see Rupert Murdoch and

have his blessing, presumably you thought that was great? I can't

remember what I thought at the time, but I learned lessons from that

episode. I learned lessons, not because who you have dinner with

and who you meet, because it is always the case in our political

culture, that politicians want good relationships with the press, they

are important. But you have to make sure you can speak out without fear

and favour on the issues as you see them, the whole political class was

too slow off the mark on this, I won't deny. That the question is

now who is willing to show the leadership and speak out on the

inquiry we need and what is happening in News International,

and all the other issue, like BSkyB. Just two weeks ago you were at a

News International, at the Orangery in Kensington, did you speak to

Rupert Murdoch? I did speak to him, briefly. Did you raise the issue of

phone hacking with him when you met him? I didn't discuss him with that.

You said you wanted to take a lead, two weeking ago you had Rupert

Murdoch in your sights and you didn't raise it? This isn't a

discussion about who we talk to and who we have relationships. But you

are the leader of the Labour Party? This is about our willingness to

speak out on the issues. There are lessons to learn. Labour has its

own problems with relationship, your head of strategy used to work

for News International and the Times, and in January, he sent out

an e-mail to Labour backbenchers saying do not just, it is a were,

pick on News International as the only paper that might be involved

in the hacking business, it could be other titles as well. And don't

raise hack anything the same breath as BSkyB. You can't be comfortable

with him doing that. The position we have taken is this, to speak out

on the hacking issues. But also to say that the Competition Commission

is the right body to make rulings on BSkyB. That is right. Jeremy

Hunt and the Government have chosen a different course. They have

chosen to go down the road of specific arrangements with News

International. They have to act on assurances from News International.

The reason why the process is becoming unstuck on BSkyB, I think

it is becoming unstuck. They are trying to get assurances from News

International. But I have to say, News International assurances are

not worth very much, given what we have seen in the past few months.

That is why I say, even at this stage, the right thing for the

Government to do would be to go to the Competition Commission. The

right process to deal with this. Let's deal with Andy Coulson for a

moment. It is now alleged that he either agreement to payments or

sanctioned other people to make payments to police officers. What

should happen to Andy Coulson? That's a matter for the police. But

what I do say is the Prime Minister has serious questions to answer

about the judgments he has made in relation to Andy Coulson, the

hiring of him originally, the bringing of him into the Downing

Street reason, also he will have to answer questions in the coming days

about what he knew and what discussions he had with Andy

Coulson, about what he actually did when he was editor and knew about,

when he was editor of the News of the World. Let's deal with James

Murdoch, because of a select committee, we know he authorised

the payment of Gordon Taylor for �750,000, is his position tenable?

I don't want to assess the police investigation. The right thing to

do is say the police investigation has to take its course. People are

saying perhaps your removal from the whole orbit of News

International and your criticism of News International is a reversal of

clause IV moment, saying we don't need News International any more,

they are bad news for Labour, is that the ways? I'm learning lessons

over what the right thing to do and the past, this is not about me, it

is about the public, up and down this country, who have been appal

bid what they have heard. The hacking of the phone of an abducted

girl. The hacking of the families of 7/7 victims. Today we learn the

hacking of phones of families of servicemen who died in this country.

That should make us look and think what kind of culture do we have in

this country. Thank you very much.

Joining me now is the Deputy Chairman of the Conservative Party,

Michael Fallon, and the Liberal Democrat MP, Lord Oakeshott.

Your leader and the Chancellor made a serious error of judgment hiring

Andy Coulson? Andy Coulson resigned from the News of the World, when

one of his reporters was convicted. He resigned again from Downing

Street. I didn't hear anybody resigning this week. The Prime

Minister made it absolutely clear to parliament yesterday that he

makes full responsibility for his employment. But, yes, but surely it

was a catastrophic error of judgment, you have just heard Alan

Rusbridger say very clearly and candidly, he spoke to somebody very

close to David Cameron, who told David Cameron that actually there

were going to be problems with Andy Coulson, and then he was warning

him off. David Cameron chose to ignore that advice entirely, and it

didn't just come from here, that is failure of judgment, or an

arrogance. You want to be very careful about the allegations.

David Cameron sought assurances from Andy Coulson before he was

appointed. He received those assurances, he employed it, in the

end Andy Coulson resigned. You are suggesting Andy Coulson lied to the

Prime Minister? I think Andy Coulson's conduct is not matter for

you, or for I n the end it is a matter for the investigation going

on at the moment, we shouldn't pre- judge it. The one thing we can say

with clarity is, when Andy Coulson was director of communications for

Her Majesty's Government, he said, in court, they had no knowledge of

payments to police officers. Now, it is possible, allegedly, he

allegedly perjuryed himself, if he is arrested tomorrow, this is a

dark day for David Cameron? These are dark days for for the inquiry

and the courts. These are matters for the courts, these are

investigations and not for you and I. Any police officer who takes

money is corrupt? These are matters for the investigation. We can't

decide on Newsnight that somebody is guilty or not. That is the whole

point of the police investigation and the inquiry that will follow.

If Andy Coulson is charged with perjury, as Deputy Chairman of the

Conservative Party, how uncomfortable will you be about

that? If he's charged with perjury it is matter for the court, he is

entitled to a trial. We can't prejudge that. If somebody is

charged we need to be careful about that. Let's talk Lord Oakeshott

about the position, vis a vis the BSkyB takeover. In your view,

should that takeover now be delayed? Certainly t should be, as

it should have been months ago. Referred to the competition

commission, as it would have been had Vince Cable still had the

decision. I will come on to Vince Cable in a molt, I want to ask you

on the Andy Coulson apair. Nick Clegg was warned specifically by

Rusbridger. Do you think it strange that Nick Clegg didn't warn David

Cameron when Alan Rusbridger said Andy Coulson in Downing Street

wouldn't be a good idea. It wasn't Nick Clegg's decision and it was

before the election. In the Liberal Democrats we sup from a very long

spoon with the News of the World and the News Corporation and

whoever works from them, unlike Labour who were close to the entire

machine and the Conservatives. We have nothing but contempt from them,

we treat them with great care. Let's talk about BSkyB, do you

think the takeover of BSkyB should go ahead and there should be no

delay? There is still a process running. Submissions close tomorrow.

The Culture Secretary has to weigh all that up. He takes further

advice from the competition authorities about that. So there is

some time still to go. The decision as to whether somebody is fit and

proper, which you are getting at. The decision about whether someone

is fit and proper to run a broadcasting organisation,

parliament decided years ago should not be a matter for politicians and

ministers, it should mash for an independent regulator which is

Ofcom. That is a continuing duty, they can decide at any point, not

just the point of the proposed merger, they can decide at any

point that they are not a fit and proper organisation. Should that

happen now? That is for Ofcom to decide, not politicians to decide.

One thing that will be decided by politicians perhaps there will be a

vote, called for by Labour next week in the House of Commons, to

delay further the decision. How will the Liberal Democrats vote on

that? I don't know how Liberal Democrats in the Commons will vote,

I know how I would vote. T as Michael said, Ofcom can, and has

only said today that they have an on going responsibility for whether

someone's a fit and proper person. And the key point here, is that why

would anyone accept an assurance from News International, I wouldn't

buy an assurance from them. The News of the World was great

prize for Rupert Murdoch when he beat off his rival, the late Robert

Maxwell, to buy the title in 1969. It is said that Murdoch loves

nothing more than a tabloid paper and he got the red top, top. Now it

is tiny, and apparently toxic, as part of his empire, and a threat to

his much bigger ambition to own the whole of BSkyB. In flash he closed

it. We have this on the giant that is News Corp.

Rupert Murdoch bought the News of the World, back at the tailend of

the 60s, to be the foundation of what has become a global business

empire. Back then he was a in a corner fighting. Mr Maxwell called

me a moth-eaten kangaroo. I never got quite to that stage!

closure of the News of the World is a sign of Murdoch's ruthless

expediency, once again he's feeting, even forethat business empire's

very survival. Film and TV in the UK, the US and around the world,

have long ago taken over as Murdoch's cash cows in chief. But

the scandal surrounding the world's best-selling English language

newspaper, have threatened them all. O2, DFS, Sainsbury's, Ford,

companies have been falling over themselves to pull advertising from

the tabloid. Murdoch feared a boycott by readers was next and

they understand where that leads. News co-operation executives know

better than anyone the cost of a public boycott. On Merseyside for

22 years, sales of the Sun have remained on the floor, because of

public anger over the coverage of the Hillsborough disaster. It is

thought 75% of readers were lost and those readers have never come

back. Claire Anders has been following the Murdoch empire for 20

years. She wasn't entirely surprised by today's shock news,

the death of News of the World? brand has been destroyed and they

have called it day. They will rename it and relaunch it as

something else. Does this end the scandal? Not at all.

James Murdoch, Rupert's son, is the man who has been running damage

limitation at News International, the UK arm of News Corporation. He

authorised pay-offs of up to a million pounds from celebrities who

threatened to sue after being bugged. Now he's saying sorry.

There was a particular settlement I authorised, and I have said was

made with information that was incomplete, I acted on the advice

of executives and lawyers. Withen complete investigation. That is a

matter of real regret for me personally. It is only weeks since

James Murdoch was spirited from London to head News Corporation in

New York. He said, memorably, he put the News of the World scandal

in a box, problem over. It was not envisaged that James Murdoch would

be moving to New York as its appointed successor, until it was

announced. In fact, previously analysts had been told that he

would be the chief executive of the European pay TV option. That

upgrade came suddenly and wasn't really flagged. Brooks Brookes

Brooks was left to sublg seed James Murdoch in the UK. Cynics felt she

had been left to carry the can. James Murdoch said that's not so.

I'm convinced that Rebekah Brooks's leadership of the company is the

right thing. She's doing the right thing for the company.

inescapably point is Rebekah Brooks is vulnerable n, in the corporate

standing she's the last one standing before James himself.

Two News Corporation agencies have broken the news. In the US, where

Murdoch makes ten times more than in the UK, the share price dropped

10%. This really sooms like something different. A different

level of awfulness. Murdoch has had really thick skin here and kind of

has that teflon aura where criticism bounces off him. This

seems like it has the potential to be more serious. It seems different.

One of News Corporation's directors has been dispatched to London to

liaise. Last time we met, he was working for the Bush administration,

as the architect of the patient yacht act, and there was a row over

phone happen - patriarch act, and there was a row over phone hacking.

For James Murdoch these are times of crisis, the father will be

hoping this will make the boy as his business heir. James must be

sweating. He must be feeling very dejected that instead of putting in

had a box with a lid on, whatever has gone into the box the lid has

gone. And we have a very, very big explosion going on. Which could

come back on him? Of new allegations, absolutely, questions

about what he knew, why he wasn't asking himself more questions, or

asking questions of other people. All of this will come up. Joining

me is Anna Adams who has spent this evening in various disreputable

drinking holes, what happened today? Everyone was called into a

short meeting this afternoon. Only five minutes. They had absolutely

no idea, they told me, what was happening, not even an inkling.

They were called in, Rebekah Brooks held a meeting, they said she was

very nervous, her voice was cracking. Every thought they were

preparing for a boycott and they were told to watch out it would be

a bad week. Then she started saying the paper had been running for so

many years, then they said they knew what was coming. There is a

sense they are carrying the can for past regime, a lot of young staff

had nothing to do with this. They hadn't even heard of Glenn Mulcaire,

why are they losing their jobs. I spoke to a News of the World

columnist, she has been on Fleet Street for 30 years, she says it's

one of the most professional papers there. None of us saw this coming,

we believed a title around for 168 years would get through this.

Everyone in that room today had nothing to do with what went on in

the past. I don't know how much more the News of the World could

have changed in the past five years than it has already. It is an

entirely different paper to what it was in the last regime. I have been

here for three-and-a-half years I'm proud to work for this organisation

and the paper. What about the mood of some others? I was in a pub in

Wapping and it was a bit like a wake a lot of alcohol, reminiscing

and hugging. Defiant, saying they will get jobs elsewhere, inwardly

they are furious that Rebekah Brooks could keep her job. They are

all going to lose their's, when they weren't there and she was.

Inwardly there is a lot of anger about that. There is a 90-day

consultation period, nobody would say that on camera. They gathered

from the Mail and Mirror, they came down to show their support. The

feeling was this will hasten the demise of newspapers in general.

This is the television Tom Latchham. Frustrated, angry, surprised, shock,

how would you feel if you were told don't show up next week your job

has finished. All those things. Exactly there were tears, I went

into the office as soon as I found out there were tears, sadness, hugs.

People standing around not knowing what to do. And there were all

those feelings. I think now we are coming to terms with it. I think we

are thinking tomorrow is another day. Joining me now is the

political editor of the News of the World, David Wooding, the former

Express and Independent editor, Rosie Boycott, and Rupert Murdoch's

biographer, William Shawcross. We heard what Anna Adams had to say,

you were there. Was there a feeling that the News of the World was

being hung out to dry, and you were a toxic brand and had you to go?

came as a bolt from the blue. It has been a week in which revelation

after revelation has come out. There was a stage when we were

saying can it get any worse than this. It continued to get worse

every day. Nobody expected this. Did this think it was a good move,

had the paper lost its reputation? Yes, we had been sullied by what

happened five or ten years ago by a previous staff. We are carrying the

can, as you say. The people who work there there is only three in

executive roles who work there at the time. People were saying

privately, not publicly, why should they lose their jobs and Rebekah

Brooks Kiev her's? Rebekah is not editing News of the World, she's

the chief executive of the group, she has gone into deep carpet land.

But the editor of the News of the World, as he is now, Colin Myler,

took over five or six years ago and is as clean as they come. Rosie

Boycott, you have edited two newspapers, what do you make of

what happened today, for the ranks and the people in the deep carpets?

I think it is terrible to blame the News of the World for what has

happened. Who is to blame is the people who work there. Who set the

culture? And how high that goes is still to be seen. The culture comes

from the top. The need to get stories, the decision to break

rules, the decision to phone hack, to go that extra 200 miles into

illegality. And any editors, news editors, overall editors, editors

in chief didn't know what was going on, is just inconceivable. It is

inconceivable that someone would be paying someone the kind of sum that

is Glenn Mulcaire was earning, �50,000, and not know everything he

was doing. Do you think the paper was that bit out of control? As I

said earlier, it was on an industrial scale, I believe the

editors knew, if they didn't, then it was out of control. You

completely agree that is it is inconceivable, that more than

�100,000, going to a private detective, without anyone knowing

about it? You were Rupert Murdoch's

biographer and know him well including motivations. Is it

realistic that he did not have a grip, I know he was upper echelon,

he zfrpbt have a grip on what was going - he didn't have a grip on

what was happening at the papers, he must have kept an eye on all

this time. Was there not an inkling he let things go too far. Avenues

control frequent wasn't he? I don't think he is, he lets editors have a

free hand if he trusts them. He accepts responsibility for this

appalling thing that has happened. And Alan Rusbridger and the

Guardian have done well to, pose it over a long period of him. Never

the less, Murdoch was living most of the time in America during this

period. He has moved to Los Angeles and New York. It wasn't in day-to-

day control. His son was? More recently, yes. I want to ask

William what is your view about why Rebekah Brooks is still being

backed, when it is clear that not just public opinion, and legal

opinion, possibly, will come to see what kind of responsibility she

bother for this, she was the editor when Milly Dowler's phone was

hacked? I believe you are right, I understand that, that would be the

public view now, I don't know what her role was. I want to know what

you think Murdoch is doing in carrying on supporting her in this

job and having his son say on camera she's doing a good job?

presumably believes she's innocent of the allegations and charges.

this doesn't shut it down, what damage ultimately does it do to the

wider Murdoch empire? I don't know, it is too early to say. You said it

was held below the water line. I hope that is not the case. Despite

what's happening in this horrendous scandal, Murdoch is one of the best

things that happened to British journalist, without his battle with

the print unions back then, he made papers profitable. Without him

there would be no BSkyB, and no competition for you at the BBC.

think that is fair point. He's bold, imaginative and he loves newspaper,

which makes it surprising he has taken that decision today. I think

the thing we need to talk about is what happened in the last two years.

We published this story two years ago to the day. This company has

been wriggling, it denied it, it went to parliament, police, it has

misled everybody, they are still paying Glenn Mulcaire, the one

person who has known the truth. They have been highly resistant to

the lawsuits. This idea that they were kes operate to get the story

out is not true. I'm struck by what you said that

Rupert Murdoch murd was a good thing because he's a - Murdoch mur

was a good thing because he understands newspapers. If he's a

good thing, what is wrong with him owning BSkyB. I don't subscribe to

the school that he's the devil incarnate, in terms of newspapers

he has kept the Times afloat. has lost �87 million two years ago

and �47 million last year. No other proprietor could do that.

We have heard there will be a Phoenix on Sunday. This is now a

problem for tabloid papers across the board. This is the start of the

obvious demise? There is no hiding the fact that tabloid papers are

suffering at the moment. We were called in by Rebekah Brooks a few

weeks ago and said we have to diversify into the website. It is a

difficult time for tabloid papers. What they have done with News of

the World, if we lost half the circulation, we would still sell

more than virtually every other Sunday newspaper. Is it the end of

the tabloids? No, you can see by the success of the Mail on-line. It

is also about gossip. The cynical interpretation of this is Murdoch

will see News of the World will lose money and advertiser, you shut

it down, you rehire the ones you want at lower rates, and start up

the Sun on Sunday. There is a suggestion that this is a grand

plan? I don't think it is a grand plan, but it has a financial plan

to it, cooked newspaper the last 48 hours. It doesn't mean if you buy

the Sun you buy the News of the World, different readerships.

not just that these papers, it is all newspapers, that is why Murdoch

has tried pay walls over the Sunday Times and the Wall Street Journal.

This is a paper he has rescued in America. The culture of tabloid

journalism, now, this will be a real problem, people see the victim,

I understand there will be more information to come, more hacking

to come, whether victims or politicians, I don't know. The more

this keeps going and the more that victims are hacked, everyone is

tainted with the same problem? culture we will lose is the culture

of campaigning journalism by the News of the Worldment we won the

military covenant enshrined in law with our campaign. We raised �1.5

million for the McCann's in 48 hours. All these things are

overshadowed by the appalling behaviour of these people, who the

not only sullied the brand but put us all out of work today. It makes

it a confusing day, doesn't it? is an astonishing day. It will be

sad if we lose the ability of tabloids to exist, they raise a lot

of money. It doesn't needing to. don't think we would have been in

this position is Rebekah Brooks and jaisms Murdoch took action in July

2009. James Murdoch inherit his father's empire? I don't know if he

wants to, it is a long way on. few moments I will be speaking to

the legendary Watergate journalist, Bob Woodward.

Another bigger ra ends tomorrow, although one with a more noble

mission. The space shuttle Atlantis will take off into the Florida sky,

the last space shuttle launch ever. We have been across to America to

talk to the teams that want to take over, now NASA is stepping aside,

including one today that signed a deal in using Kennedy space

facilities. Opening up for everyone, not just astronautings. What could

be the next chapter in space - astronauts. What could be the next

chapter in space? By tomorrow morning, this beach

will be packed, it is a has been for every significant launch,

because this is Coco Beach in Florida, the closest to Kennedy

Space Center, and the launch pad of the space shuttle. This beach has

seen everything, from the first American in space, and Lance

Armstrong on the moon. And, of course, every shuttle launch.

The shuttle is magnificent, of course, but it is really a delivery

van, it is a way of getting stuff up to the space station. When

people were inspired by space, they think of Apollo and the moon

landings, that is what inspired the space fans, the enthusiasts, the

billionares, people like me into science. The shuttle never really

did. Your average shuttle launch was never very memorable, and

neither was the shuttle particularly good at the frequent

cheap space hops it promised. But its friends say it was still a

pioneer. The shuttle is huge, it is like a big aeroplane, and the fact

that it did not turn out to be as inexpensive as people hoped, and we

couldn't fly it as frequent. It was the first generation, nobody knew

how to build a reusable space shift. So is it time for radical change in

gear, opening up space to more than just elite astronauts. In the 1960,

that is what I promised, space travel for everybody, you and me.

Here in the rockies, they think they might have a way to do that.

In the basement at Colorado University, there is a team using

NASA money and an old NASA spacecraft to try to fly people

into space. It is headed by a veteran of five shuttle missions.

You must be Jim? Welcome. That is the ship we are in, not that one,

it is a scale model. This one, a mock-up, tucked into the corner.

left NASA in 2003 and went to teach into university. I came back to

work on the new commercial space industry to attempt to take this

vehicle off the shelf, from what NASA had done to use modern

technology and materials to make it into a new spacecraft to take

humans to the International Space Station and back. In zero gravity

it is very nice, we would float gently towards the end of the

tunnel, there would be plenty of room. In terms of experimentry with

this craft, what is this about up here? This is a model of the dream

chaser. They dropped the one fifth scale model from 40,000 feet, this

flew autonomously and then parachuted back to earth. They are

also building a full size version for structure tests. They are

working out how best to play controls, which is proudly homemade.

Pull back gently, softly we will come back up. This is how you start

programmes like this. The students started off with cardboard, they

cut out boxs to make their first cockpit and made the panels.

Because it is very cheap, they spent $20 on the first panel

displays. They get the idea on that. Then they built the more rigid

structure with panels and switches they can replace. You can swap them

out with others and they can test different types of switches. People

will look at this and think not NASA? It is, NASA does the same

thing, they spend a lot more money doing the same thing that we have

done. This cost us $30,000. The quality and evacillations was as

good as I have seen at NASA. The dream chaser project has $20

million of NASA money. Just today it signed a deal to take off and

land at the Kennedy Space Center. It dependss on buying a NASA rocket

for launch. Out here in the California desert like Anne proch

that evokes the 1950s. It is doing away with all the bureaucracy and

the slow timetable, it is back to workshops, that kind of, we can do

it, quickly and cheaply, mentality. A strange mix of businesses here.

The people here want a step by step approach, than NASA's grand

projects. Why is this place unique? It is a few miles from the airport

where test pilots flew into the unknown, breaking the sound barrier

and on to the edge of space. Before NASA existed. The big boys are here,

over there is Virgin's space ship two. Over here we have a company

that wants to take people to space for about half the price, in that

ship. If you want to hop on the cockpit I will give you a tour.

That was another model, inside this one is a rocket plane they have

already flown in. You fit pretty good, you could be a

rocket pilot. Have you guys had chance to ride in this one?

rocket raceer we all had a ride. What did it feel like? Amazing,

when you tow out to the runway, you are in a quiet place. 3-2-1 you hit

the switch, and your head is pinned to the street.

What is the link between what you are doing and the old X planes?

They thought simply to how we did, do incremental testing, don't make

something giant, start small, we did that and proved we could build

something safe enough to put someone in it.

Their first two planes were not designed to go into space, but

their third craft, the Lynx, still under construction, will be. Only

for sub orbital flights, an easy option. In other part of the

country there is a team working on a different approach. Moving away

from planes, using capsules on top of rockets. What are you doing?

This is a test lift of a single common propulsion modual. We call

it that because this is the central building component for all our

rockets. Five of these CPSs would be bundled together into the

Neptune 30, it is called that because it lifts 30 kilograms to

lower earth's orbit. This is crunch year for Randa and her husband, rod,

they have been here for 16 years and plan this first orbital launch,

which they say is sold out. Cheap satellites come first, but by 2014

they want to send people up too. This is the six-person capsule. We

will take a pilot and five crew members to do the earth orbit.

is very ambitious, we are standing in front of the wooden mock-up. How

will you convince people you will get ready for the stage of being

ready for flight in three or four years? We have on going programmes

that will demonstrate the viability of these rockets. First of all with

our satellite launch vehicles. That will be a great confidence builder.

We are looking to travel ourselves. So we want to make this as safe and

reliable as possible. That is why we have built rocket that is are so

radically simplified in their systems, that they will be safest

types of vehicles around. Do you think you will be one of the first

passengers? Not the first, because we will be conducting the launch.

At the moment these smaller companies are really not ready,

maybe it is time now to give them a few years, see if they can have a

shot of the dream of making space available to more people, people

like you and me. The future pay belong to the

smaller outfits, but to those who play a part in the shuttle years,

there is a lot to be proud of. The mission to prepare the Hubble

Telescope is the most memorable, a the man who walked in space to fix

it agrees. I have done satellite, science experiments, I have fixed

Hubble, I have done spacewalks, I have had a great time. Maybe he's

right, there is a lot to remember about the shuttle years.

# If you should ever leave me # Life would go on believe me

# Life could show nothing to me # What good would living do me

# God only knows what I'd The shuttle may have failed to

bring space flight to the mass, but over $500 million a launch, it

would never do that. But it still had its moments.

Now back to the death of the News of the World. Joining me now from

Washington to give the view across the Atlantic on our newspaper

scandals is Bob Woodward, the legendary reporter who broke

Watergate. Thank you very much for joining us. How does today's drama

look from where you are sitting? is a lightning bolt. And the idea

of closing this newspaper, I have never heard of something like this

in the news business. Because of an investigation, a scandal. Initially

I was concerned that the whole Government was kind of piling on

poor Rupert Murdoch. But for him to close the newspaper, is, in a sense,

a plea deal. In other words, he is saying there is something seriously

rotten here, so rotten we are going to get rid of this organ in the

body. Now I think the impact of that will be to unleash everyone. I

mean I heard two cases today of people saying this is a giant media

scandal. There are books in it, investigative reporters are going

to be out. People who work their there are going to be interviewed.

Probably new revelations and so forth, you will have this very,

very serious opening of the bod. I guess it should officially in

America. Tell me more, seriously b the

empire, what do you think about - about the empire, what effect do

you think it will have on the empire in the states? It will

depend on the facts. Here it will be called Rupertgate, and it has

got all of the elements, all of the power, all of the secrecy, give

Rupert Murdoch his due, brilliant manager of newspapers. He's done an

awful lot, made an awful lot of money. Everyone wants to look at

all of the details here. He is in for a real scrubbing. Here we have

a situation where he closes the newspaper, all the journalists go.

But his chief executive, Rebekah Brooks, editor at the time of one

of the alleged phone hackings, still in their positionment does

that have all the elements of a drama. That he's protecting her as

a human shield for his son James. If you remember in Watergate the

question about Nixon was what did he know and when did he know it.

The question is obvious about Rupert Murdoch b Rebekah, what did

she know and when did she know it. There are official, police and

Government, investigations, which I suspect will try to get to the

bottom of it. Other report remembers, in the United States

here, there is a real rivalry that has escalated between the New York

Times and Murdoch's Wall Street Journal. I noticed today, the New

York Times had a front page story about all the criticism of Murdoch,

and another story in the business section. The former New York Times

editor used to say, "flood the zone", they will have all sorts of

reporters on that. He is an elderly man, and we don't know when the

acsession will be. Will it survive as an empire, or with the demise of

Rupert Murdoch, the whole landscape will change, even for tabloid

journalists and investigative journalisms. We don't know the

future, everything can happen, and it will depend hopefully on the

facts. There shouldn't be a presumption that they don't have

the evidence yet, to show that X, or Y, knew all about it. My

following of it, this is a scandal that has been festering for months,

for years. A wise executive at the top, if I may say, when you have

something like that going on for months l say, let's clean house,

let's get to the bottom of it. He obviously didn't do that.