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updated 7/14/2011 12:25:48 AM ET 2011-07-14T04:25:48

On the day when Rupert Murdoch retreated from the biggest media takeover bid in Britain’s history, the wider significance that many here see for the way that power in the country is wielded found its most poignant expression in the sight of an ordinary family standing silently, subdued but assuaged at last, at the door of 10 Downing Street.

It had taken less than 10 days for the anger that swept Britain over the story of Milly Dowler’s cellphone to build into the political earthquake that forced Mr. Murdoch, the 80-year-old tycoon, to abandon the latest, and what could be the last, of his great business coups — an attempt to acquire the rest of British Sky Broadcasting for the News Corporation, the corporate giant that makes Mr. Murdoch one of the world’s most powerful news media figures.

The Dowlers had been shielded, until Wednesday, by their lawyer, Mark Lewis, who has fielded a frenzy of media questions since the story broke last week: how, according to the police, a Murdoch-owned tabloid, The News of the World, had hacked into the voice-mail messages of the 13-year-old Milly after she was abducted in 2002 and while her family waited for some sign that she was still alive.

Story: Murdoch's News Corp. withdraws bid for BSkyB

That sign came, they thought, when the police told them that some of the messages they had left on the cellphone she was carrying had been deleted. In reality, the police said, the messages were erased at the newspaper’s behest, to make room for more messages that could be hacked to embellish articles on her disappearance. Ms. Dowler was later found murdered, and her killer, a nightclub bouncer, was tracked down years later and sentenced to life in prison.

In the years since, a faltering police investigation pointed to the Dowler case as only one of scores, possibly thousands, of cases in which ruthless newspapers, mainly The News of the World, have been accused of engaging in phone hacking — as well as other covert newsroom tactics that may have included identity theft and bribery of police officers — in their relentless pursuit of scoops.

Key players in the phone hacking scandal

But now, the Dowlers were in the eye of the nation, greeted at 10 Downing Street by Prime Minister David Cameron, invited earlier for a meeting with the opposition leader, Ed Miliband, and welcomed as honored guests in the visitors’ gallery at the House of Commons. They became witnesses to the day when the cascading accusations about wrongdoing by newspapers in Mr. Murdoch’s British stable brought not only the withdrawal of his $12 billion bid for British Sky Broadcasting, but also what many politicians hailed, perhaps without too much overstatement, as the day when the country’s long-skewed democratic balance began to be restored.

On the Downing Street pavement, Mr. Lewis, speaking to a news media throng, said that after what had been “an earth-shattering week for everybody,” the family was pleased with the withdrawal of the British Sky Broadcasting bid because it demonstrated that “however big an organization is,” it could be held to account in a society under law. “Politicians and the public,” he said, “are saying, ‘Enough is enough.’ ”

The words could have been the theme for what was happening 500 yards away in the House of Commons, where something not witnessed in decades was happening. In recent times, the 700-year-old chamber has been mired in conflict, and some would say ignominy, as a result of an expenses scandal that ended the careers of dozens of lawmakers in the prelude to last year’s general election.

But Mr. Murdoch’s abandonment of the takeover in the face of political pressure — in particular, the united will of an outraged House of Commons — generated a sense of something like a liberation from Britain’s rampaging tabloids. They were celebrating having curbed, at least for now, the influence of editors and reporters who had become something of a parallel power with little accountability, even if the lawmakers themselves sometimes empowered the tabloids by failing to rein them in.

Story: Reeling Murdoch faces tough choices

Mr. Cameron described it as “a firestorm that is engulfing parts of the media, parts of the police, and indeed our political system,” and as “a victory for the good, decent people of Britain.” John Whittingdale, chairman of a parliamentary committee that has set next Tuesday for a hearing on the scandal, said, “The position of the press will never be the same again.”

The panel has summoned Mr. Murdoch and his son James, who is chief of his British subsidiary, News International, as well as Rebekah Brooks, the chief executive of News International, to be the principal witnesses.

Mr. Miliband, the Labour Party leader, said that lawmakers had “for too long just shrugged our shoulders and done nothing” in the face of the tabloid abuses, and added that Parliament had to show that “nobody is above the law.”

Almost every speaker demanded an new era of tighter regulation for newspapers, one in which politicians and ordinary people would no longer live in fear — a word that occurred often — of having their families, lives and careers destroyed by intrusive, get-the-story-at-all-costs journalists. Making what many of those present considered the best parliamentary speech of his career, the former prime minister, Gordon Brown, the victim of a 2006 scoop in The Sun about his infant son’s cystic fibrosis, unleashed what may have been the most damning diatribe against Mr. Murdoch ever heard from a prominent British politician.

History of phone hacking scandal

He said that Mr. Murdoch and his papers had “descended from the gutter into the sewers” and “let the rats out” against public figures like himself and ordinary people who could not defend themselves.

He said they had created “a criminal-media nexus,” and if action was not taken against them now “our friends across the world who admire our liberties will ask what kind of a country we have become.”

He added, speaking of the Murdoch newspapers, “What should have been the greatest defenders of our freedoms have become the greatest abusers.”

This story, “Victim's family appears amid rage at tabloids,” originally appeared in The New York Times.

Tim Arango and Evelyn M. Rusli contributed reporting.

Video: Murdoch’s News Corp. drops BskyB bid

  1. Closed captioning of: Murdoch’s News Corp. drops BskyB bid

    >>> so does the anger surrounding the media empire of rupert murdock . the phone hacking scandal has already taken a big prize away from him. his company news corporation badly wanted to buy the big satellite network bskyb. today they dropped their bid. there's no telling where this ends, but this is all new territory for this huge media figure and for great britain. nbc's stephanie gosk is in london for us tonight. stephanie , good evening.

    >> reporter: news corps got beat up all day today both before and after they dropped out of the bid. one of their fiercest critics, former prime minister gordon brown who accused murdock 's papers of law breaking on what he calls an industrial scale.

    >> order! order!

    >> reporter: in parliament today politicians for once found something they could agree on. rupert murdock 's news corporation, they said should drop their bid for news network bskybuy.

    >> they've got to stop talking about mergers until they sort out the mess they created.

    >> reporter: but even before they voted, news corps beat them to it.

    >> they have decided in the last few moments they would withdraw.

    >> reporter: states they would walk away from a deal potentially worth billions. in a statement, the company said it has become clear that it is too difficult to progress in this climate. the climate turned hostile just ten days ago after news of a 14-year-old's cell phone had been hacked by news corps's reporters. news corp shut that paper down perhaps hoping to save the bskyb deal. but it didn't work.

    >> rupert murdock has rarely been thwarted in his ambitions. for the most part he has umt matd ultimately achieved what he has wanted to.

    >> reporter: and he has achieved a lot. starting with a single newspaper inherited from his father, rupert murdock has amassed some of the world's best known, most watched brands. movie studios , television networks , cable companies , internet properties, magazine and book publishing , all part of the murdock empire. if you're watching " american idol ," "the simpsons" or "glee" you're watching news corps. "the wall street journal ," the "new york post," fox news and 20th century fox movie blockbusters like avatar or x-men. and it's all made a fortune for murdock and given him enormous business and political clout. now really for the first time, that power is in jeopardy. tonight there's signs that murdock 's troubles could spill out of the uk and across the atlantic. there are three u.s. senators and one congressman calling for separate, u.s.-led investigations of news corp. brian?

    >> stephanie gosk in london tonight .

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