Allegations that victims of the 9/11 terror attacks had their mobile phones hacked have prompted an investigation by the FBI.
The latest development in the phone-hacking saga is another step backwards for Rupert Murdoch, who had hoped to contain the scandal by shutting the News of the World tabloid last week.
Pressure on News Corp has been growing all this week as a number of senators demanded that the US attorney-general and its Securities and Exchange Commission assess whether any US laws have been broken.
Republican congressman Peter King, who had called for an FBI inquiry earlier this week, said he viewed the possibility that terror victims' phones could have been hacked as "contemptible".
The News Corporation boss has announced an "independent non-employee" will investigate the allegations.
But attention is already focused on next Tuesday's grilling of Mr Murdoch, his son and deputy chief operating officer James Murdoch and News International chief executive Rebekah Brooks by the Commons' culture, media and sport committee.
Yesterday saw the Murdochs bow to parliament's will in agreeing to attend the session - but only after they received a summons from parliament's deputy serjeant-at-arms.
Mr Murdoch told the Wall Street Journal newspaper that some of the claims made against him in parliament are "total lies".
"We think it's important to absolutely establish our integrity in the eyes of the public," he said.
"I felt that it's best just to be as transparent as possible."
Despite speculation that he may decide to sell his three remaining UK newspapers - the Sun, the Times and the Sunday Times - Mr Murdoch made clear he hopes to continue with a strong media presence in Britain.
He said News International had a "reputation of great good works in this country" and said that the damage to his company was "nothing that will not be recovered".
Claims of a sell-off were "pure and total rubbish", he said. Former prime minister Gordon Brown, who has made a number of allegations against Mr Murdoch's company's links with the "criminal underworld", had "got it entirely wrong".
The 80-year-old media mogul, commenting on the impact the scandal was having on his mood, replied: "[I'm] just getting annoyed. I'll get over it. I'm tired."