Rupert Murdoch will testify before an angry British Parliament Tuesday on the tabloid phone-hacking scandal, and a report suggests his role as CEO of News Corp. hangs in the balance.

Bloomberg reports that Murdoch may be replaced as CEO by chief operating officer Chase Carey, although Murdoch would remain as chairman.

The company is struggling to regain shareholders' confidence amid growing fallout from the phone-hacking scandal.

U.K. lawmakers could be particularly demanding of Murdoch in the high-profile televised inquiry.

Bloomberg says that other executives who watched Murdoch prepare for the inquiry were worried about how he handled questions.

Murdoch and his son James, along with former News Corp. executive Rebekah Brooks, are all scheduled to testify on how much they knew about the alleged phone-hacking practices of their employees.

The scandal has wiped billions in stock market value off News Corp., leaving many investors thinking the company might be better off with new leadership.

Meanwhile, Murdoch suffered another humiliation Monday -- being declared prematurely dead by one of his own newspapers, after a hacker group targeted The Sun.

The hacker group known as Lulz Security took over the website of The Sun tabloid, writing a fake story saying that Murdoch, the paper's owner, had been found dead in his garden. Users were then directed to the hacker group's Twitter feed.

Lulz Security took responsibility on Twitter, saying it was a successful "Murdoch Meltdown Monday."

The hacker group has previously targeted Sony, Nintendo and even the CIA.

Meanwhile, police are examining a computer, phone and paperwork found in a bag that was dumped in a garbage bin near the London home of Rebekah Brooks, the ousted chief executive of Murdoch's British newspaper arm, according to a report.

The Guardian newspaper is reporting the bag was tossed into a garbage bin in an underground parking garage only metres from where Brooks lives with her husband, a close friend of British Prime Minister David Cameron.

The paper says the bag was handed over to security and Brooks's husband, Charlie Brooks, tried to reclaim it but was denied.

Police were called and seized the bag.

Charlie Brooks, through his spokesperson, denied that the bag had anything to do with the tabloid phone-hacking scandal that led to the arrest of his wife Sunday. He claims the bag is his and was mistakenly thrown into the garbage by a cleaner.

Police are now reviewing security camera footage to determine who threw out the bag, and how it ended up in the parking lot.

Scandal widens

Meanwhile, News of the World scandal continued to expand Monday with the rapid resignations of two top officers with London's police force, amid claims of possible eavesdropping, bribery and collusion.

Even the prime minister has been feeling the heat on the scandal, as he cut short a trip to Africa and called an emergency session of Parliament for Wednesday so he could speak on the matter.

On Tuesday, U.K. lawmakers will grill Murdoch, his son James, and Brooks on a televised public hearing where it is expected they will demand to know how much executives knew about the alleged phone-hacking practices of their employees.

Cameron says his Conservative-led minority government has "taken very decisive action" by starting up the judge-led public inquiry into the matter.

"We have helped to ensure a large and properly resourced police investigation that can get to the bottom of what happened, and wrongdoing, and we have pretty much demonstrated complete transparency in terms of media contact," Cameron said.

But opposition leader Ed Miliband said Cameron has to answer "a whole series of questions" about his relationship with Brooks, James Murdoch, and others related to News of the World.

Monday also saw the death of one of the first whistleblowers in the tabloid scandal that has engulfed the British parliament, Scotland Yard and Murdoch's News Corp. empire. Police have said the death is not considered suspicious.

Sean Hoare, who alleged widespread hacking at the now-defunct News of the World, was found dead at his English home.

He was quoted in the New York Times saying that breaking into the voice mail of celebrities, politicians, other journalists and even murder victims was encouraged under the leadership of then-editor Andy Coulson.

Coulson -- who was recently employed as Cameron's communications chief -- has since been arrested in the widening scandal.

The London police force (also known as Scotland Yard) is increasingly facing its own internal crisis in relation to the phone-hacking crisis.

On Monday, Assistant Commissioner John Yates -- Scotland Yard's top anti-terrorist officer -- resigned, following police chief Paul Stephenson, who quit on Sunday. Both were linked to a former executive at News of the World.

Britain's police watchdog said it received allegations of wrongdoing in relation to the scandal against four senior officers -- Yates, Stephenson, and two former senior officers.

Some of the claims relate to the hiring of people with links to the News of the World.

The London police force is also under pressure to explain why its original hacking investigation only led to the prosecution of a single reporter and a private investigator.

It was Yates who decided two year ago to not reopen a police inquiry into the phone-hacking allegations.

But when detectives reopened the investigation this year they said they found the names of 3,700 potential hacking victims.

A total of 10 people have since been arrested in connection to the case.