British phone-hacking scandal was a low point for Rupert Murdoch

Reporting from London —  Rupert Murdoch’s legacy will forever be tarnished by the phone-hacking scandal that has engulfed British journalism for a decade.

What began as an investigation of eavesdropping on members of the royal family by “one rogue reporter” came to seismically change the British news media.

The scandal shuttered a major Sunday tabloid newspaper - The News of the World - and led to the arrests of numerous journalists and the conviction of some, including the paper’s former editor, Andy Coulson.

The 84-year-old Murdoch is stepping down as chief executive of 21st Century Fox, transferring leadership to his son James in a significant generational torch-passing that was first reported Thursday by CNBC.

Both Rupert and James Murdoch were called upon to testify at a parliamentary committee where they vehemently denied any wrongdoing or involvement in the British newspaper scandal, and said they never tried to hamper the police investigation.

But mud sticks, and Murdoch’s reputation, which was already sullied in the eyes of many as owner of two of the nation’s often-salacious tabloids, only plummeted further.

James fared even worse.

He was chief executive of News Corp’s British newspaper group during the period when phone hacking was rife and was recalled to the hearing to face allegations that he made misleading comments during his first appearance.

In a grueling question-and-answer session, his family business was likened to the mafia and he admitted being aware of a damning email that contained evidence of widespread phone hacking.

James left London for New York soon after, a move many saw as an effort to distance himself from the mess unfolding in Britain.

This makes James’ rise to become the new chief executive of 21st Century Fox all the more remarkable.

Suggestions that tabloid journalists were hacking phones by using the device’s pre-set pin code to access private voicemails first surfaced in 2005 when messages between Princes William and Harry appeared in the tabloids.

Royal reporter Clive Goodman and private investigator Glenn Mulcaire were charged with intercepting messages and sentenced to several months in prison in 2007.

Coulson denied knowing about his reporter’s actions but resigned as News of the World editor.

The paper vowed to investigate but said the “one rogue reporter” had been brought to justice and the episode was behind it.

Yet within a few years the floodgates opened.

It emerged that phone hacking was prolific at the News of the World and had targeted celebrities, politicians and soccer players.

But it was a story that broke in July 2011 that pushed the British public’s revulsion over the edge.

The phone of 13-year-old Milly Dowler, who was abducted and killed in 2002, had also been hacked.

News of the World reporters had listened to the teenager’s voicemail before her body was discovered, deleting messages to make way for new ones, giving her parents false hope that she was hearing them and might still be alive.

It later emerged that the voicemails of fallen Iraq and Afghanistan soldiers had also been intercepted as well as those of Scotland Yard investigators who were looking into the News of the World case -- the implication being that they themselves became a target for trying to take on the media empire.

Murdoch described the allegations as “deplorable and unacceptable” while still distancing himself personally, and defending Rebekah Brooks, who was Coulson’s predecessor as News of the World editor, later becoming News International chief executive.

But it was too much for the newspaper to handle. As advertisers and readers turned their backs, it closed in July 2011.

Coulson, who had become Prime Minister David Cameron’s chief press officer, was arrested, followed soon after by Brooks, often described as the daughter Murdoch never had.

The commissioner and deputy commissioner of Scotland Yard resigned for failing to adequately investigate fully when the case initially surfaced.

Coulson and Brooks stood trial but only Coulson was convicted. He was sentenced to 18 months in prison, and Brooks, who had quit as News International chief executive, took time out from the limelight -- until recently.

In April, News Corp. confirmed that it was in talks with Brooks about starting a new digital business.

Her future within the 21st Century Fox media empire seems certain to continue, even if the phone hacking scandal has still not been put to rest.

Just this week, the News of the World’s deputy editor from 2003 to 2007, Neil Wallis, went on trial for conspiring to hack phones.

Prosecutor Julian Christopher told the jury it was “inconceivable” that he did not know what was going on, so more heads could still be set to roll.

Boyle is a special correspondent.