RUPERT Murdoch’s News Corporation has dramatically withdrawn its bid for BSkyB this afternoon.

It follows the huge controversy over phone-hacking which has seen the closure of the News of the World.

News Corp, which also owns the Sun and the Times newspapers as well as its 39% shareholding in BSkyB, said it will continue to be a long-term shareholder in the company.

Chase Carey, deputy chairman, president and chief operating officer of News Corp, 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.”