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| David Cameron and Rebekah Brooks |
It's a reminder of how rapidly things can change - just a few days ago this would have been unthinkable. A political crisis (this goes beyond the Murdoch empire to to the heart of government) can emerge unexpectedly and in places we wouldn't predict. It is a long-running scandal, but this week's events have brought about a radical shift in its scale and severity.
We have also been reminded of the power of popular pressure, especially when it targets the big money. The focus on lobbying advertisers appears to have been vital in deepening the crisis for News International.
However, this announcement should also be understood as a desperate attempt at damage limitation. That such an extraordinarily drastic measure is required gives us a sense of the crisis for Murdoch. But it's designed to stop the momentum for holding those at the top - notably Rebekah Brooks, chief executive of Rupert Murdoch's News International - accountable and pursuing serious independent and indeed criminal inquiries.
It is even being speculated that News International will launch a new Sunday tabloid (extending The Sun to Sundays). I'm sceptical about whether that can plausibly work after this week's damage. I certainly don't accept the claims of cynics that it's all really just a rebranding exercise - that underestimates the seriousness of current problems.
The direct economic damage has been minimal: a noteworthy fall on the stock exchange but hardly critical, and the NOTW provides only a small fraction of Murdoch's profits (satellite and cable television actually provide the lion's share of revenue). But the withdrawal by advertisers and threat of a consumer boycott have been complemented by acute anxieties about a crisis in one corner of the empire threatening the whole edifice. Reputation matters.
None of us should shed any tears for the demise of a vile newspaper like News of the World. It isn't just the shocking news of the last few days, though the phone hacking represents new depths to which it has sunk. This is - like sister newspaper The Sun - a viciously right-wing, pro-cuts newspaper which spews out propaganda serving elite interests. It is a paper which vilifies the most vulnerable people in society, sows divisions, and feeds racism and jingoism.
The current crisis weakens the power of the enormously powerful News International in our political life. It also causes jitters (to say the least) for much of the national press beyond Murdoch's control. The NOTW's collapse is a further crack - on top of this week's revelations - in the right-wing media.
But hundreds of journalists and other newspaper staff are not the criminals, and shouldn't be punished for the despicable behaviour allegedly sanctioned by Coulson and Brooks. Unions like the National Union of Journalists (NUJ) will of course fight on behalf of their members, who are paying the price for others' misdeeds.
The real price needs to be paid by those ultimately responsible. It is ludicrous that Brooks remains in her post. The campaign for her, and others culpable, to be held to account needs to step up a gear. We don't yet have any justice.
The announcement that a decision on Murdoch gaining total control of BSkyB is postponed until at least September is a result of pressure, such as the Avaaz petition and 38 Degrees petitions. But we must use the delay to promote the message that Murdoch cannot be allowed any more control of this country's media.
Media power should not become even more concentrated. This plan shouldn't even be on the political agenda. Why is it? Precisely because of Tory loyalty to the Murdoch press and a desperation to keep it on side. This issue is now likely to become the central focus for campaigning, not least because it matters so much - economically and politically - to Murdoch. But it's also vital because it goes to the crux of realtions between this government and a hugely influential media corporation.
A full independent inquiry, as wide ranging and comprehensive as possible (nothing off limits), is essential. Cameron and friends will be desperately hoping any inquiry can be contained in its remit and become a sop to enraged public opinion. They want us to forget Andy Coulson was, until January, the prime minister's communications chief. There also needs to be a serious investigation into police corruption - not merely the police investigating the police.
Tory culpability goes further. Tory politicians have obsequiously courted Murdoch and his newspapers, despite knowing of many of the phone hacking allegations. In fact the whole political class - with honourable exceptions like Labour MP Tom Watson (rarely has someone been so spectacularly vindicated!) - has cravenly sought approval from Murdoch's press.
Ed Miliband, after a hesitant start, at least has enough political nous to distance himself and his party from the taint of Murdoch. Whether that leads to a wider re-appraisal of Labour's populist approval-chasing, in its relations with the press, is another matter.
Politicans' servitude to wealthy and unelected media barons - committed to preserving the power of the whole capitalist class - has been part of the hollowing out of democracy. Until this week - when political leaders were forced by extreme circumstances to voice criticism - we have had so little parliamentary challenge to their power. And press regulation is toothless.
It also seems police officers have been directly corrupted, but the police's own ideological biases mean they were never likely to pursue the rich and powerful with much vigour. Those officers who were paid off should be sacked without delay.
All this takes the crisis beyond the press. I am normally reluctant to make predictions, but I'll predict that today is a long way from the end of the matter. The Guardian is reporting that Andy Coulson is to be arrested on suspicion of knowing far more than he's let on. Peter Oborne in the Telegraph wrote a coruscating attack on Cameron's own role, suggesting this could become toxic for the prime minister, causing damage he simply can't repair.
Widespread outrage will certainly not be satisfied by today's announcement: millions of people have a deep instinct for justice, and this isn't justice. They are fed up with powerful figures and institutions thinking they can do as they please - however unethical and loathsome their behaviour - without even a semblance of democratic checks and balances. They are determined that things must change in our media, our democracy, our politics.
What underpinned the NOTW's behaviour was a ruthless hunger for profits in a competitive marketplace. This market logic is why a number of other newspaper groups are not sitting too comfortably right now. They have plenty to hide too. The MPs' expenses scandal exposed a dimension to politics which had previously been obscured; this media scandal has done something similar for the press.
Ultimately we need media which aren't dominated by commercial imperatives - by a belief that the bottom line of profit justifies anything - and in the control of a small elite of very rich, powerful interests. There is a broader struggle here for another kind of media. The popular anger (and beginnings of campaigning action) in response to this week's developments opens up new possibilities in that long-term struggle.
Also see Des Freedman's Counterfire article - News of the World closure: another media is possible
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