Rupert Murdoch said he was "sorry" he hadn't closed the News of the World years ago" in evidence to the Leveson Inquiry on Thursday.
The 81-year-old News Corp boss referred to the tabloid as an "aberration" which had caused a "blot" on his reputation.
He told the inquiry into press standards he "panicked" when he closed it in July.
"And I would say it succinctly, I panicked. But I am glad I did."
"I am sorry I didn't close it years before and put a Sunday Sun in," but said he held back because of its readers.
"Only half of them ever read The Sun," he said. "In fact only a quarter of them read it regularly. So that probably was brought into consideration at the time."
Murdoch said the Milly Dowler scandal had such an impact that "you could feel the blast coming in the window almost”.
The News Corp chief said his son and former News International chief executive Rebekah Brooks took the decision.
"It was a decision taken very quickly by my son, I think… Mrs Brooks was still there, and myself.
"It was done, like that."
Murdoch also apologised to the "innocent" journalists who lost their jobs when the paper closed.
A former senior News of the World journalist told The Huffington Post UK that Murdoch's apology, however, was not enough.
"Rupert Murdoch admitted at Leveson today that his negligence caused the closure of the News of the World. He says he can only apologise to innocent journalists at the paper, but he has not. Instead, they are banned from working at News International on spurious grounds.
"He has also failed to adequately compensate for the devastating effect on the livelihoods of these innocent journalists who worked so hard to prevent unethical practices at the paper following the exposure of phone hacking.
"As to whether or not he really didn't know about any alleged cover up at the News of the World who knows?"Suggest a correction