VIDEO: Murdoch shuts down News of the World amid hacking scandal

In an astonishing response to a scandal engulfing his media empire, Rupert Murdoch shut down the News of the World on Thursday, Britain's biggest selling Sunday newspaper.

As allegations multiplied that its journalists hacked the voicemails of thousands of people, from child murder victims to the families of Britain's war dead, the tabloid haemorrhaged advertising, alienated millions of readers and posed a growing threat to Murdoch's hopes of buying broadcaster BSkyB .

Yet no one, least of all the paper's 200 staff, was prepared for the drama of a single sentence that will surely go down as one of the most startling turns in the 80-year-old Australian-born press baron's long and controversial career.

"News International today announces that this Sunday, 10 July 2011, will be the last issue of the News of the World," read the preamble to a statement from Murdoch's son James, who chairs the British newspaper arm of News Corp .

Staff gasped and some sobbed as they were told of the planned closure of the 168-year-old title, the profits of whose final edition will go to charity.

"No one had any inkling at all that this was going to happen," said Jules Stenson, features editor of News of the World, outside the News International offices.

It seemed a bold gamble, sacrificing a historic title that is suffering from the long-term decline of print newspapers to stave off a threat to plans to expand in television: "Talk about a nuclear option," said a "gobsmacked" Steven Barnett, professor of communications at Westminster University.

But some analysts predicted Murdoch would make The Sun, the tabloid daily that is Britain's best-selling newspaper, a seven-day operation and that the demise of the News of the World would ultimately benefit News International's bottom line. - News agencies

The flawed ethics of a national newspaper institution