Phone hacking: News Corp to face legal action in US

There was more bad news for media baron Rupert Murdoch today as lawyers representing the murdered British teenager Milly Dowler said they would soon launch legal action against News Corp in the United States.

It was the report that 13-year-old Dowler's phone was tapped allegedly at the behest of the News of the World that proved a tipping point and led to a series of events, including the closure of the tabloid and several resignations and high profile arrests.

Mark Lewis, lawyer for the family of murdered teenager Milly Dowler, told newspersons that the legal action would be directed against the directors of the News of the World's parent company, News Corp, substantially owned by Murdoch.

The legal action will be lodged in New York.

It will mean a significant escalation of the phone-hacking controversy and may even threaten the position of Murdoch in the company.

Lewis said the basis on which the legal action in the US will be based is that the illegal news gathering practices at the News of the World broke not only British law but potentially also American law.

Since the News Corp is based in the US, the company and its directors could be held responsible.