Rebekah Brooks, the News International chief will be staying on in her role despite mounting calls for her to step down.
The embattled executive told around 200 staff at the News of the World who are expected to lose their jobs that the company would try to find them new roles within News International.
In a letter to staff leaked on Friday she wrote: "The company will focus over the coming months on finding as many jobs as possible for the News of the World staff both within News International and the wider company".
A Comres poll of 2,028 people commissioned by Five News earlier in the week showed that 75% of people believe Brooks should leave her role as a result of the phone hacking scandal, which will see the News of the World publish its final edition on Sunday.
Angry staff staff at the paper are calling for her resignation while other commentators are also adding pressure.
The phone hacking scandal deepened on Friday when Andy Coulson, former News of the World editor and ex-spin doctor for David Cameron, the prime minister, was arrested in central London.
Clive Goodman, former royal editor at News of the World, was also been arrested for the second time in connection with the phone hacking scandal. He was jailed for four months in 2007 after he pleaded guilty to intercepting phone messages.
Reports have suggested that a further three former employees could be arrested over the scandal in the coming days.
Coulson was detained at 10:30am on Friday in South London by detectives investigating allegations of phone hacking and officers in charge of a corruption inquiry.
"Officers from Operation Weeting together with officers from Operation Elveden arrested a man on suspicion of conspiring to intercept communications, contrary to Section1(1) Criminal Law Act 1977 and on suspicion of corruption allegations contrary to Section 1 of the Prevention of Corruption Act 1906," Scotland Yard said in a statement.
He was later released on bail until October, police said.
David Cameron, who employed Coulson as his media adviser, has come under fire for his decision. He defended the move at a press conference but said that Rebekah Brooks should have stepped down over the allegations.
The News of the World publishes its final edition on Sunday after James Murdoch, chairman of publishers News International, said the 168-year history of Britain's best-selling newspaper would come to an end.
Advertisers had deserted the News of the World in droves and police revealed 4,000 people may have had their phones hacked by the tabloid. The Royal British Legion dropped the News of the World as its campaigning partner and expressed "revulsion" at allegations that war widows' phones may have been hacked.
Murdoch, the son of media mogul Rupert Murdoch, pulled the plug on the paper after claims that it paid private investigators to illegally intercept the voicemail messages of murdered schoolgirl Milly Dowler, bereaved military families and relatives of 7/7 bombing victims. It also stands accused of paying thousands of pounds illegally to corrupt police officers.
10/07/2011 11:48 BST
Ken Livingstone Says During His Time As Mayor No One Said There Was A Cover-Up.
He tells the Politics Show that no one from the Guardian, the paper who exposed the scandal, said there were more revelations to come or he would have demanded the police investigate.
10/07/2011 11:43 BST
Former Cabinet Minister David Mellor On Sky:
It's a sense, this 1930s chicago element of this, that all these people, including the Prime Minister, were so frightened of Murdoch either because of his political power, or frightened because they'd wake up one morning and find something in the papers their wife wouldn't like.
I worry about Dave Cameron because he seems to be getting all of this wrong.
He should stand up now and say 'I've told Rupert Murdoch, do not embarrass me by pursuing this application because the British public will not have it. Instead of which he doesn't, fumbles around. He's lost ground.After all those times having happy little drinkies with Rebekah Brooks the Prime Minister owes it to all of us to raise his game.
10/07/2011 11:35 BST
Shadow Culture Secretary Ivan Lewis Tells The Politics Show:
"It’s a new era, and politicians have a duty to speak out for the public.”
10/07/2011 11:32 BST
Chris Bryant: Yates Should Go
|@ ChrisBryantMP : It is inconceivable that Yates cd remain. He misled parliament - and when I called him on it, threatened to sue. and who paid his lawyers?|
10/07/2011 11:23 BST
Rupert Murdoch Has Arrived In London
The BBC reports
10/07/2011 11:12 BST
Transport Secretary Philip Hammond on Sky stresses that Ofcom "at any time" can intervene on the basis of fitness and properness of News International to buy out BSkyB.
10/07/2011 10:47 BST
Simon Hughes' Full Quote About The BSkyB Merger And Voting With Labour
“The position for this week is clear, I think, if there’s a debate and vote in the House of Commons, I will be suggesting to my colleagues that we as a party, a party that’s never been close to Murdoch, never been in this inner loop, I think we should make clear that we think there should be a postponement of the decision.
There shouldn’t be a decision while the police investigations are going on, and we should let the police investigations run their course.
And can I add I don’t think it’s only the News of the World, if the judicial inquiry does it’s full work, which will be in the frame of what the information commissioner made clear in 2006, that many titles, owned by many different people, and other titles owned by News International which have been guilty, not just of hacking but of other offences. And I think that now is the time we bring all of that up.”
10/07/2011 10:36 BST
A Sunday Times Journalist Tweets About Chris Huhne's Allegations Her Paper Hacked
|@ camillalong : Do we think Chris Huhne's suggestion that the ST is involved in hacking is anything to do with our 3+ damaging stories about his driving?|
10/07/2011 10:18 BST
Guardian Editor Alan Rusbridger On Whether He Warned Number 10 On Coulson
He tells Sky that he "got messages through to all the three party leaders" about the extent of revelations to follow.
10/07/2011 10:10 BST
Simon Hughes Is On Sky:
He says he will suggest to his colleagues to "make clear" that there should be a postponement of the BSkyB merger. He also says he thinks other titles have been guilty of hacking and "other offences".