A Labour MP has referred James Murdoch's testimony before parliament to the police investigating phone hacking, after two former News International executives called the businessman's evidence into question.
Tom Watson told the BBC on Friday he has asked the Metropolitan police to investigate the statements of the News International chairman. He said he would formally bring the testimony to the attention of Sue Akers, the Assistant Commissioner leading an official investigation into the scandal.
The Metropolitan Police confirmed they had received a letter from the Labour MP.
His comments came after Colin Myler, former News of the World Editor and ex-legal chief Tom Crone said that Murdoch knew phone hacking was more widespread at the organisation. In a statement released on Thursday the pair said that they had informed James Murdoch about an email from the lawyers of the Professional Footballers' Association's Gordon Taylor, which indicated phone hacking went beyond one "rogue" reporter.
"Just by way of clarification relating to Tuesday's CMS Select Committee hearing, we would like to point out that James Murdoch's recollection of what he was told when agreeing to settle the Gordon Taylor litigation was mistaken," the statement said.
"In fact, we did inform him of the "for Neville" email which had been produced to us by Gordon Taylor's lawyers."
James Murdoch, who looks after News Corp's Europe and Asia interests, has said he stands by his testimony before the Commons select committee, which he appeared at alongside his father Rupert, the News Corporation chairman.
During that hearing he told the committee that he was not aware of the email suggesting that hacking was more widespread at the organisation.
Watson told the BBC that the latest development was "the most significant moment" into the phone hacking investigation. He also said that if Crone and Myler's allegations were correct, then Murdoch had "bought the silence" of Taylor, who he is reported to have paid £700,000.
"It shows that he not only failed to report a crime to the police, but because there was a confidentiality clause involved in the settlement, it means that he bought the silence of Gordon Taylor and that could mean that he is facing investigation for perverting the course of justice," he told the BBC.
Prime Minister David Cameron said Murdoch had "questions to answer in parliament" following the latest developments.
"Clearly James Murdoch has got questions to answer in parliament and I’m sure that he will do that and clearly News International has got some big issues to deal with, and a mess to clear up.
But he said it was up to the company to sort its management issues out.
John Whittingdale chairman of the Commons culture select committee, said James Murdoch will be asked to provide additional information on the claims made by Myler and Crone.
“Obviously those two statements are in conflict, we were going to ask James Murdoch in any case to supply us with additional information and we will certainly be asking him to address this point when he does so," he said.
Chris Bryant, another Labour MP who campaigned to bring the phone hacking scandal to light, has written to News Corporation non-executive directors calling for Rupert and James Murdoch to be suspended.
In an email to the directors, seen by Sky News, Bryant wrote:
"James Murdoch was expressly asked about the question of the payout of £700,000 to Gordon Taylor.
"As you will know, this is far in excess of any normal amount payable for a privacy case.
"The Max Moseley case which was adjudicated around the same time awarded just £60,000 whilst James Murdoch maintains that he was advised that a court would be likely to award £250,000, which when added to the legal costs of £500,000 to £1 million would make £700,000 a saving to the company.
"I'm afraid this either represents really bad legal advice that completely ignores the part 36 procedure whereby claimants are at risk of paying the defendant's legal costs if they refuse an offer - or else it is a plain lie."