LONDON — Rupert Murdoch's News Corp. abruptly withdrew its bid to take over Britain's biggest satellite broadcaster today, bowing to intense pressure from lawmakers and a general public outraged over a spiraling phone-hacking scandal involving newspapers owned by the Australian-born tycoon.

"We believe that the proposed acquisition of BSkyB by News Corporation would benefit both companies, but it has become clear that it is too difficult to progress in this climate," Chase Carey, the deputy chairman of News Corp., said in a terse statement released here this afternoon.

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Peter Macdiarmid/Getty ImagesRupert Murdoch's News Corp. withdrew it's bid to own BSkyB following intense pressure from the fallout of the News of the World phone hacking scandals.

The decision was a humiliating turnaround for Murdoch and for News Corp., which has been seeking government approval for months to take control of BSkyB. Owning the broadcast company would have represented a major expansion of Murdoch's already-large media empire in Britain, which includes newspapers such as the Times of London and the Sun.

Only 10 days ago, Murdoch seemed on track to receive the green light for his $12 billion bid. The British government had given strong indications it would grant permission for the takeover on the grounds that antitrust rules on media ownership would not be violated.

But opinion within Parliament and the nation has strongly turned against Murdoch amid a cascade of revelations that newspapers belonging to News International, the British subsidiary of News Corp., resorted to unethical and sometimes illegal methods to gather information on politicians, celebrities and relatives of murder victims.

To contain the fallout, News International has already shut down the News of the World, the popular weekly tabloid at the center of allegations that its reporters hacked into people's cellphones in pursuit of scoops.

The decision to withdraw the bid for BSkyB was announced only hours before lawmakers were scheduled to debate and vote on a measure calling on News Corp. to drop its attempt to take over the broadcaster. The measure was expected to pass overwhelmingly with support from all parties in the House of Commons. The extraordinary show of unity demonstrated how toxic Murdoch has become after having been one of the most politically influential men in the country through his media properties.

Despite dropping the takeover bid, News Corp. will retain its 39 percent share of BSkyB.

"News Corporation will remain a long-term shareholder in BSkyB," Carey's statement said. "We are proud of the success it has achieved and our contribution to it."

Earlier Wednesday, Prime Minister David Cameron thundered his disapproval of a media giant that until recently he had assiduously cultivated.

"There needs to be root-and-branch change at this entire organization," Cameron told lawmakers. "What has happened at this company is disgraceful. It's got to be addressed at every level, and they should stop thinking about mergers when they've got to sort out the mess they've created."

Cameron announced the appointment of a respected judge to lead two public inquiries into the cellphone-hacking scandal and into the relationship between the media, police and politicians.

He also continued to defend his appointment of a former editor of the News of the World, Andy Coulson, as his chief communications aide. Coulson stepped down from that job in January because of the hacking controversy.

Coulson has since been arrested and released on bail in connection with a massive police investigation into the scandal and allegations that the News of the World paid corrupt police officers for information.

http://www.nj.com/news/index.ssf/2011/07/murdochs_news_corp_withdraws_b.html