James Murdoch was sensationally accused of being a Mafia boss by Tom Watson as he faced a fierce grilling over News of the World phone hacking on Thursday.
In an explosive exchange, Watson accused Murdoch of subscribing to a Mafia-style “code of silence” over hacking.
“I think you must be the first mafia boss in history who didn't know he was running a criminal enterprise,” he said to Murdoch.
Moments earlier Watson revealed he had secretly been speaking to former News of the World reporter Neville Thurlbeck about the whole issue of phone hacking.
After a hostile and potentially devastating exchange, Watson then read out the transcipt from a private conversation Thurlbeck had with Tom Crone, the former News of the World legal manager.
"'Is there any way we can get round this?" Thurlbeck said to Crone. Crone told him: "Nev I'm sorry I'm going to have to show him [Murdoch] this because it's the only reason we have to settle."
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The whole question of phone hacking had previously centred around the infamous “For Neville” email.
Murdoch again insisted again that he was never shown a transcript of the email which suggested that phone hacking at the News of the World went beyond a single rogue reporter.
Watson then tried to liken the Murdoch family and News International to the Mafia, but was told he was being “offensive”.
After Watson read out his email, Huffington Post UK political editor Chris Wimpress, who is in the committee hearing, live blogged: “After a short pause, Murdoch reiterates his line. I had no discussions about widespread hacking. Committee is chuckling.”
After the Mafia allegation, there were "Some murmurs of surprise in the committee room. JM says the accusation is ‘inappropriate’."
Documents released by News International's former lawyers Farrer & Co last week suggested there was an earlier discussion between Mr Myler and Mr Murdoch, around May 27 2008, at which the "For Neville" email might have been raised.
A briefing note prepared at the time by Mr Crone said that its discovery left the company in a "very perilous" position.
But Murdoch said he could not recall discussing the Gordon Taylor case with Mr Myler before June 10 2008.
The News of the World's former royal editor Clive Goodman was jailed for phone hacking, along with private investigator Glenn Mulcaire, in January 2007.
Documents released by the committee this week showed that Goodman was paid three months' salary, totalling £22,504, following his guilty plea to hacking charges, and went on to receive further payments totalling more than £240,000 later in 2007.
Murdoch said he did not discuss the phone-hacking convictions or the pay-outs to Goodman with his predecessor as News International executive chairman, Les Hinton.
"I had no discussion with him about it. He didn't raise it with me or brief me on it," he told the committee.Suggest a correction