The phone hacking scandal that has engulfed Rupert Murdoch's media empire has forced the mogul's son, James, to announce Tuesday he will be stepping down as chairman of British Sky Broadcasting PLC.
The younger Murdoch will remain on the BSkyB board, but will be replaced as chairman by Nicholas Ferguson, who has served as deputy chairman.
CTV's London correspondent Ben O'Hara-Byrne reported Tuesday that the move was inevitable.
"(BSkyB) turned into a very profitable company. There was no anger about (Murdoch's) chairmanship as far as his business acumen was concerned," O'Hara-Byrne told CTV News Channel in an interview from London.
"But certainly the phone hacking scandal has reached in to all parts of the Murdoch empire now, and this was just the latest."
"(It's) another bad day for the Murdoch family more or less," O'Hara-Byrne added, "but a lot of observers are saying that really this is about protecting the family's reputation."
The scandal has rocked News International, the British newspaper division of Rupert Murdoch's News Corp. worldwide media empire. Revelations that journalists regularly hacked the private telephone messages of celebrities, crime victims and even members of the Royal Family led to the closing of the company's News of the World tabloid and the arrests of several of its British journalists.
News Corp. owns 39 per cent of BSkyB. Murdoch remains deputy chief operating officer of News Corp.
In a letter to the BSkyB board, the 39-year old Murdoch said he was determined that the interests of BSkyB should not be undermined by matters outside the scope of this company."
"I am aware that my role as chairman could become a lightning rod for BSkyB and I believe that my resignation will help to ensure that there is no false conflation with events at a separate organization," he said.
Murdoch's father and News Corp. president Chase Carey issued a brief statement of appreciation for James's "successful leadership of BSkyB."
"He has played a major role in propelling the company into the market-leading position it enjoys today and in the process has been instrumental in creating substantial value for News Corp. shareholders," they said.
The younger Murdoch has long been viewed as his father's heir apparent. But in February, he quit as chairman of News International, saying he wanted to focus on the television business.
But the company's attempt to take complete ownership of BSkyB was derailed last summer, after the hacking scandal broke.
The revelations of phone hacking have led to multiple police investigations and a public inquiry, and have forced several executives in Murdoch's empire to resign. The company has made millions of dollars in settlement payments to dozens of victims, including actor Jude Law and singer Charlotte Church.
James Murdoch has denied having intimate knowledge of the goings-on at News of the World, though others dispute that claim.
He wrote a letter to British lawmakers last month in which he said he could have done more to investigation allegations of inappropriate behaviour at News of the World, but said he had been given "false assurances" by associates.
With files from The Associated Press
