07/07/2011 15:24 BST | Updated 07/09/2011 06:12 BST

News of the World Closure does not let Cameron off the Hook

David Cameron had been hoping he could keep a safe distance from the scandal engulfing News International.

As things stand he is struggling to do so and the closure of the News of the World does nothing to bolster the Prime Minister's position.

There is widespread agreement in Westminster that Cameron needs to take a stronger lead on the scandal, along with the growing suspicion that his close links to some of the key players are holding him back.

The imminent closure of the News of the World does not change the fact that Cameron is closely linked to the paper through his associations with Andy Coulson, Rebekah Brooks, Elisabeth Murdoch and others.

Writing in the Telegraph today, Peter Oborne was clear about the problem: 'The Prime Minister has allowed himself to be horribly compromised by his connection with News International and its employees.'

Rupert Murdoch is now sacrificing one part of his empire to protect his TV interests. His primary aim is to push through the BskyB takeover. Cameron could still stop the takeover in its tracks. Does he have the cojones?

Such a move would undoubtedly be an immediate PR hit for Cameron. It could prove to be the only way to ensure the whole episode is not still hanging around his neck at the 2015 election. But such a move comes at a cost. As well annoying some close pals, does the PM really want to lose the backing of The Sun and The Times?

The subject is certain to be dominating discussions within Cameron's inner circle. It is an almighty dilemma. But it is by no means the first time that a Prime Minister has been faced with an audacious demand from a powerful media baron.

In 1919, David Lloyd George had to decide what do when Lord Northcliffe demanded a seat at the peace conference that reordered the world after the war. Cameron's team should bear in mind his response:

'I would rather cease to be prime minister than be at the beck and call of Northcliffe, Rothermere and co.'