Deputy Prime Minister Nick Clegg has said there are "big questions" over whether Rupert Murdoch's company is a fit and proper owner for a television company or a newspaper.
In a clear indication that the furore over the phone hacking scandal is not over despite the withdrawal of the BSkyB bid and the closure of the News of the World, he said there were still questions about News Corp's "fitness and properness".
"That's exactly why Ofcom now are looking at it. The thing that I think isn't quite clear, to me at least is exactly how the fit and proper tests are applied."
His comments came as the inquiry into phone hacking at News International claimed another arrest, with Neil Wallis, former executive editor of News of the World, detained at a west London police station..
Scotland Yard said the 60-year-old, who is said to have served as a deputy under former editor Andy Coulson, was taken for questioning at a local police station on suspicion of conspiring to intercept communications, Sky News and the BBC reported.
Clegg has called on Rebekah Brooks, Rupert and James Murdoch to answer questions before parliament over the scandal, saying executives were not yet taking "responsibility":
"If they have any shred of sense of responsibility or accountability for their position of power then they should come and explain themselves before a select committee."
His comments came ahead of a speech on the media, in which he called for independent regulation of the press:
"There is now an inescapable need for an overhaul of the regulatory system too. The PCC has failed as an effective watchdog," he said.
"What we need is independent regulation, insulated from vested interests within the media, and free from Government interference too."
MPs on the culture, media and sport select committee will decide Thursday whether to use parliamentary powers to force Brooks, the beleaguered News International chief executive, to attend a parliamentary hearing.
Clegg told the BBC there was a "systemic" problem with the press and the phone hacking scandal was symptomatic of a "cosy" relationship between the police, press and politicians.
"It clearly goes beyond News International. It's clearly something much more systemic."
He added: "For many, many, people in this country who felt previously that the press was on their side they now see that the press actually turned on many of the most vulnerable people and abused their privacy in an illegal way but also that this whole episode has cast a spotlight on that sort of murky world of the British establishment.
"The police, the press and politicians . We must now take this opportunity to clean things up and make sure the public once again trust those institutions. It's going to take a while, but I think we need to start the debate right away about what we want to see come out of this."
The government yesterday announced a judge-led inquiry into the phone hacking scandal, which will look at police corruption, the relationship between the press and politicians, and the behaviour of the News of the World.