Rupert Murdoch said sorry on Friday to victims of criminal phone hacking by one of his tabloids after confidante Rebekah Brooks quit as head of the British newspaper arm of his News Corp media empire.

Moving to get ahead of a scandal washing over his global business, the US-based magnate made a personal apology to the parents of a murdered schoolgirl in what appeared to be an admission that the News of the World, then edited by Brooks, had in 2002 hacked into the voicemails of their missing daughter.

It was that damning allegation, in a rival newspaper 10 days ago, which reignited a five-year-old scandal that has forced Murdoch to close the News of the World, Britain's best-selling Sunday paper, and drop a $12 billion plan to buy full control of highly profitable pay-TV operator BSkyB .

The crisis has broken the spell that Murdoch, 80, has held over British politics for three decades as leaders from Margaret Thatcher, through Labour's Tony Blair to current Conservative Prime Minister David Cameron sought his support.

It has also raised questions from shareholders over his family's management of the business. And, following the arrest of nine journalists so far since police relaunched inquiries in January, it raised the possibility of legal action against yet more senior executives of the multinational corporation.

A direct apology from Murdoch, who has been summoned to answer questions before a parliamentary committee, will be carried in all national newspapers this weekend under the headline "We are sorry". The text was released by News International.

"The News of the World was in the business of holding others to account. It failed when it came to itself," Murdoch wrote in the article, which was signed off "Sincerely, Rupert Murdoch".

"We are sorry for the serious wrongdoing that occurred. We are deeply sorry for the hurt suffered by the individuals affected," he added.

"In the coming days, as we take further concrete steps to resolve these issues and make amends for the damage they have caused, you will hear more from us."

He also met parents of Milly Dowler, a 13-year-old abducted in 2002 and found murdered six months later. Police are investigating whether someone engaged by the News of the World not only listened in to the missing teenager's cellphone mailbox but deleted some messages to make room for more.

That misled police hunting for her and gave her parents false hope that their daughter might still be alive. Brooks, now 43, was then editor of the News of the World and has denied knowing of any such practices at the time.

"He apologised many times," said Mark Lewis, the Dowler family lawyer. "I don't think somebody could have held their head in their hands so many times to say that they were sorry.”

British PM under fire

Brooks, who had resisted pressure to quit, resigned on Friday as chief executive of News International -- hours after Prince Alwaleed bin Talal, who says his Kingdom Holding  is the second biggest shareholder in News Corp, said she had to go.

The former editor of the News of the World and of flagship daily tabloid The Sun, was a favourite of Rupert Murdoch, who described her as his first priority when he flew in to London this week to manage the crisis.

In her place, he named a trusted News Corp veteran, New Zealander Tom Mockridge, who has spent the past eight years running the group's Sky Italia television interests in Italy.

Speaking before Brooks's resignation to the Wall Street Journal, which he owns, Murdoch had defended the way his managers had handled the crisis.

He spoke of "minor mistakes" and dismissed suggestions, floated by some shareholders, that he should sell off the troubled newspaper businesses on which his empire was founded but which bring in only limited profits.

Yet within a day of what sounded like an effort to play down the scandal, his abrupt change of tack into a hand-wringing mea culpa appeared aimed at shoring up the wider company.

The scandal has shaken Prime Minister Cameron, who is under fire for his personal relationship with Brooks and for hiring another ex-editor of the News of the World as his spokesman.

Cameron suffered another blow on Friday when an aide said he had hosted a visit from his former spokesman Andy Coulson in March this year -- two months after Coulson quit his job.

He has now launched a judicial inquiry into the phone-hacking affair, which also includes allegations of corrupt payments to police by journalists.

Murdoch, a U.S. citizen, has been courted for decades by Britain's political elite as a kingmaker who could influence voters to shift left or right.

He now faces a showdown with parliament on Tuesday when lawmakers on the media committee grill him, his son James and Brooks. During an angry debate this week, one legislator called him a "cancer on the body politic".

"Rogue reporter" defence dropped

Brooks, whose youth, mane of red hair and former marriage to a soap opera star have given her a high public profile in Britain, said in a message to staff:"My desire to remain on the bridge has made me a focal point of the debate. This is now detracting attention from all our honest endeavours to fix the problems of the past.

"Therefore I have given Rupert and James Murdoch my resignation. While it has been a subject of discussion, this time my resignation has been accepted."

She said she felt "a deep sense of responsibility for the people we have hurt. I want to reiterate how sorry I am for what we now know to have taken place," she added.

That appeared an acknowledgement that the News of the World's invasions of private voicemails went well beyond those of the royal aides whose complaints led to the jailing of a reporter and an investigator in 2007. Police say they are now probing whether another 4,000 people -- including victims of crimes, bombings and war -- were targeted. – Reuters