John Yates resigns amid News Corp. meltdown

LONDON — The News Corp. phone hacking and police corruption scandal has claimed its latest high-profile victim with the resignation of Britain’s second most powerful cop, John Yates, assistant commissioner at the Metropolitan police.

Yates, whose exit follows yesterday’s sensational resignation of Metropolitan Police Commissioner Paul Stephenson, was announced as it emerged that the U.K. parliament will delay its summer vacation because of the turmoil over the saga that has, in the words of the Daily Mail, paralyzed U.K. politics, the media and the police.

This is to enable the increasingly uncomfortable Prime Minister David Cameron to make a statement about the scandal, now being seen by commentators as ”Britain’s Watergate,” as attempts by Cameron and News Corp. to take control of the controversy have conspicuously failed to bear fruit.

Yates’ stood down after he was informed he would be suspended pending an inquiry into his relationship with ex-News of the World deputy editor Neil Wallis, known as ”the Wolfman of Fleet Street.”

British MPs were due to begin their summer breaks July 20 but under pressure from opposition leader Ed Miliband, Cameron has agreed to keep parliament open for another 24 hours.

This should enable pols to respond to the grilling of News Corp. toppers Rupert and James Murdoch, and Rebekah Brooks, who ankled last week as News International’s CEO, by a House of Commons committee scheduled to hear evidence from the trio tomorrow afternoon.

Yesterday Brooks was arrested and detained by police for more than nine hours.

Her lawyer later said that Brooks, a close friend of Cameron’s and well-connected to other senior British pols, including Tony Blair, was ”not guilty of any criminal offence.”

Also due to appear before the committee is Stephenson, who quit after it emerged that the London Metropolitan police had hired Wallis as a PR consultant.

Wallis was arrested last week, but has always denied knowledge of phone hacking when he was deputy editor of the now defunct newspaper.

It also emerged that Stephenson had accepted free hospitality at a health spa that employed Wallis as a PR.

There are claims of police collusion in News International’s alleged cover-up of ”industrial scale” interception of private phone messages at the News of the World, whose previous editors include Brooks and Andy Coulson, who until January worked as Cameron’s director of communications.

Coulson was arrested July 8 and, in common with Brooks, has been released on bail until October.

James Murdoch, News Corp’s deputy chief operating officer and Brooks’ former boss, is under increasing pressure to ankle as chairman of BSkyB, the U.K. pay box controlled by News Corp.

Last week News Corp. withdrew its bid to own BSkyB outright as British politicians, including Cameron, said it would not be in ”the public interest” for the bid to go ahead.

There is speculation that James will be asked to stand down temporarily as chairman of BSkyB by the end of this week.

His future as News Corp’s heir apparent could depend on how he performs before pols in the House of Commons tomorrow.

One theory gaining currency in Blighty is that unless James raises his game and gets on top of the crisis, his sister Elisabeth Murdoch, who runs shingle Shine, may emerge as the favorite to succeed Rupert as the conglom’s head.

That, however, depends on whether Rupert himself survives in charge of News Corp. in the weeks ahead, especially if suggestions that News of the World journalists hacked into the phones of victims of 9/11 turn out to have substance.

A report in yesterday’s Sunday Times, which is owned by Murdoch, suggested that it was Elisabeth who persuaded Rupert and James that Brooks had to quit.

According to Murdoch biographer Michael Wolff, Elisabeth was overheard saying that ”James and Rebekah fucked the company” at a book launch party hosted by her husband, U.K. PR man Matthew Freud.

A Shine spokesman denied that Elisabeth said anything of the kind.

Meanwhile, an unsigned leader in the Murdoch-owned Wall Street Journal, whose publisher, veteran News employee and ex-News International topper Les Hinton, resigned July 15, claimed that the entire hacking row was being driven by British paper the Guardian and the BBC for ”commercial and ideological motives.”

News Corp. has announced that legal eagle Lord Grabiner QC will chair the management and standards committee being set up to oversee the clean-up operation at News International.

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