Murdoch humiliated as News Corp kills BSkyB bid

News Corporation has withdrawn its bid to take over BSkyB. In a statement, Rupert Murdoch's media conglomerate said: "We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies but it has become clear that it is too difficult to progress in this climate."

News Corp owns News International, the organisation which was forced to close down its News of the World tabloid last week following the revelation that its phone hacking targets included the murder victim Millie Dowler as well as celebrities.

Downing Street welcomed the withdrawal of the bid in a statement, while the deputy prime minister Nick Clegg said it was the "decent and sensible thing to do".

BBC political reporter John Pienaar described the scene in Westminster, where MPs were preparing to debate a motion supported by all three main political parties calling on News Corp to withdraw its bid for the portion of BSkyB it does not yet own.

"MPs were queuing up to speak over the coming three hours and are having to rapidly rewrite their speeches," he said.

Politicians strike back at last. The BBC's business editor Robert Peston said the move was an "extraordinary reversal of corporate fortune" and "a huge humiliation" for Murdoch. After pushing politicians around for two decades, he said, "the political classes have struck back". He added: "Questions will now be asked whether this is the full extent of the damage to the empire."

A great day for democracy. Former Labour deputy prime minister John Prescott, who believes he was hacked by News of the World journalists, didn't bother to disguise his delight, tweeting: "ByeSkyBye! Well done to everyone who campaigned. Great day for democracy. It's the people wot won it!"

Labour leader Ed Miliband took a similar line, saying: "This is a victory for people up and down this country who have been appalled by the revelations of the phone hacking scandal... People thought it was beyond belief that Mr Murdoch could continue with his takeover after these revelations... They told Mr Murdoch: 'This far and no further'."

Time for a Murdoch apology? Tom Watson, a Labour MP who has pushed the issue of phone hacking, was possibly a little carried away when he called for an apology from the media mogul, saying: "Rebekah Brooks has to answer about the payments question to the police. James Murdoch has to answer about the authorised payments to buy the silence of hacking victims. Rupert Murdoch is invited to the select committee next Tuesday. I hope he will use the opportunity to apologise to all the people that the criminals in his organisation targeted."

Is Murdoch playing the long game? Emily Bell, Director of Tow Centre for Digital Journalism at Columbia Journalism School, suggests on Twitter that News Corp's actions may be part of a long term plan, asking if it would be "strategically better to withdraw from BSkyB bid now, straighten management and return to it later".

She added: "I would still put money on Murdoch owning all of Sky in two years' time, but would not be surprised if UK papers are gone by then." ·