News Corp. has dropped its $12B bid to acquire the remaining 60 percent-plus shares of British Sky Broadcasting satellite TV operation after U.K. Prime Minister David Cameron, an ally of Rupert Murdoch, called for the media combine to pull the offer.

Deputy chairman and president Chase Carey said the bid for BSkyB was yanked because it “has become clear that it is too difficult to progress in the climate” following reports the hacking scandal that have rocked News Corp.

“News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it,” said the company’s statement.

Cameron today called for a broad inquiry into the ethics of the British media led by senior judge, Lord Justice Leveson. That probe also will investigate media payments to the police and law enforcement’s alleged cover-up of illegal activities by the media. There are calls for News Corp. CEO Rupert Murdoch to testify.

Meanwhile, U.S. Senator Jay Rockefeller, who chairs the committee on commerce, science and transportation, wants an investigation of News Corp. following reports that its properties hacked the phones of victims of 9/11.

The West Virginia Democrat promises severe consequences if the privacy of Americans was violated by the paper.

Britain’s Daily Mirror reported News Corp. journalists tried to obtain phone data regarding 9/11 victims from a private investigator. There are allegations that families of victims of the London bus bombings also were hacked.

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