Their findings grabbed attention not just in the UK but across the Atlantic, where headlines in the New York Times, Washington Post and Murdoch’s own Wall Street Journal must have made uncomfortable reading for News Corp. staff and shareholders.

The committee’s judgment carries no threat of sanction, but with lawsuits pending in the US over hacking and the threat of possible prosecution under the powerful Foreign Corrupt Practices Act, it will offer little in the way of reassurance.

Having conceded that the British parliamentary inquiry was right to highlight “serious wrongdoings” at the now defunct News of the World title, News Corp. took issue with the “unjustified and highly partisan” verdict on its boss.

Murdoch himself issued a statement to staff admitting mistakes but declaring that “our business has never been stronger.” News Corp.’s board also issued a statement saying it had “full confidence” in its CEO and chairman.

However, with criticism of Murdoch continuing to mount in the UK, questions were being raised as to what extent the report would harm his business interests both here and in the United States, with some shareholders suggesting it was time to shift power out of Murdoch’s hands.

A day after the report, elements of his $50 billion media empire appeared to be attempting to distance themselves from Murdoch, not just by prominently reporting the committee’s scathing assessment, but by explicitly stating their independence of his command.

There was speculation that a small surge in News Corp. share prices in the wake of Tuesday’s verdict reflected anticipation that the company would soon divest itself of its troubled UK newspaper titles and set wheels in motion to reduce Murdoch’s influence over the company.

Rupert Murdoch is “finished in the United Kingdom,” wrote Michael Wolff, author of “The Man Who Owns the News,” an unauthorized biography of the News Corp. founder. “Understanding that Britain is a lost front, he will retreat to his U.S. stronghold. From New York, the process of disposing of the British papers, which, by reliable insider accounts, has begun, will hasten.”

Of primary concern in the UK is whether the “not a fit person” verdict will have any impact on a separate inquiry by British communications industry regulator Ofcom over whether News Corp. is a “fit and proper” owner of a lucrative 39.1 percent stake in prominent broadcaster BSkyB.

Any decision that would force News Corp. to offload its BSkyB holding would be a considerable blow to the media giant, which had hoped to buy the broadcaster outright but later abandoned the deal after the phone hacking scandal inflamed opposition.

On Wednesday, BSkyB’s chief executive, Jeremy Darroch, used the publication of record financial results to disassociate his company from Murdoch and — clearly wary of the threat to its prized broadcast license — talk up its annual $1.6 billion tax contribution to the British economy.

“I would emphasize that it’s important to remember that Sky and News Corporation are separate companies,” he told reporters. “We believe that Sky’s track record as a broadcaster is the most important factor in determining our fitness to hold a license.”

Aware of the potential damage his presence could bring to the company, Murdoch’s son James last month stood down as chairman of BSkyB, saying he didn’t want to be a “lightning rod” for criticism over the hacking scandal.

Speculation is now mounting over whether the News Corp. brand will also be vulnerable to critical, financial and legal thunderbolts if Murdoch senior resists shareholder efforts to usher him into a backseat role.

“I think you have to be careful about extrapolating from what has been an appalling set of circumstances around one newspaper group … to the continuing demise of News Corp.,” said Charlie Beckett, director of Polis, a media and society think tank at the London School of Economics.

Beckett said that while the parliamentary verdict would certainly cast a shadow over any News Corp. deals, mergers or takeovers in the future, there was nothing inevitable about the demise of the company or its subsidiaries.

Likewise, he said that while there was support for scaling down Murdoch’s control over News Corp., shareholders would also bear in mind the fact that the media tycoon’s sharp business acumen has consistently paid dividends, regardless of any questions of ethical culpability.

“There are some people who would welcome the defamiliarization of the company, but you could also argue that this is a guy who has an extraordinary track record on delivering profit,” he told GlobalPost.

Beckett said that plans would already have been in place to arrange a succession of command, and while these may now be fast tracked down from five years to two, News Corp. would be unwise to proceed with too much haste.

“It’s in everyone’s interest for the thing to not fall apart in the next year or two. Even those people who want Murdoch to recede don’t want him to jump out of the top floor. That would be far too destabilizing.”

Now, Murdoch appears to be fighting back.

He and his son James were in the U.K. this week to face the Leveson inquiry, a judicial investigation into press standards, begun last year in the wake of revelations that journalists at Murdoch’s U.K. titles illegally hacked the voice mails of prominent public figures.

This time, he and his family appear to have turned on the British establishment, pressuring Prime Minister David Cameron and putting a key minister in the spotlight over a controversial business deal.

In his evidence on Tuesday, James Murdoch released documents that appeared to show that Jeremy Hunt, a media minister charged with examining a $13.4 billion bid by Murdoch’s News Corp. for full control of British Sky Broadcasting, had secretly helped to progress the deal.

The revelations sent Cameron’s government into a tailspin. Cameron pledged to stand by Hunt — who is overseeing the 2012 Olympics — while Hunt himself was forced to defend his actions to Parliament, denying claims he gave News Corp. a “back channel” of influence over the bid.

In an attempt to limit the damage, Hunt’s advisor Adam Smith — a key link in communications with James Murdoch — tendered his resignation at the same time that a relaxed-looking Murdoch senior was taking the stand to deny he held any sway over Britain’s politicians.

News Corp.’s bid to buy BSkyB was ruled out last year in the wake of the phone-hacking scandal, an outcome that soured the once-cordial relations between Murdoch and Cameron. This breakdown appears to have set the tone for Murdoch’s reappearance.

Even before giving evidence at the Leveson inquiry, Rupert Murdoch appeared to be on the offensive against the government. Last month he took to Twitter to complain about “old toffs and right wingers” — a likely dig at the British establishment.

More followed when he arrived in London last weekend. In one tweet he criticizes the economic policies of Cameron’s government. “Govt sending IMF another ten bn to he euro. Must be mad,” he wrote.

Murdoch’s offensive and the question mark over Hunt couldn’t come at a worse time for Cameron. His government is already under fire for provoking a recent fuel crisis and for a financial budget that was derided in Parliament as an “omnishambles.”

A recent poll showed the ruling Conservatives have lost their command over the main opposition Labour Party, largely as a consequence of the budget.

To make matters worse for Cameron, it was announced on Wednesday that Britain had slumped back into recession despite forecasts of economic recovery.

But, despite his tweets, Murdoch insists he hasn’t been gunning for the government. Asked by Leveson counsel Richard Jay if “rumors” were true that he had not forgiven Cameron, he said they were not. He added: “Don’t take my tweets too seriously.”

Speculation had been rife that Murdoch would use his Leveson appearance to launch a “slash and burn” offensive, as one commentator put it. Some speculated his revelations could take direct aim at Cameron, possibly making the prime minister’s position untenable.

The Brookses were arrested, along with four others, “on suspicion of conspiracy to pervert the course of justice.” This was the second time Rebekah Brooks, the former editor of the Sun and the now-shuttered News of the World, had been arrested — the last time it was for conspiring to intercept communications, or “phone hacking” — and this arrest suggests that News International’s extensive efforts to cover up their unethical practices may end up damaging the company just as much as the unethical practices did.

Brooks’ newspapers gathered a great deal of news by illicitly listening to the voice-mail messages of celebrities and members of the royal family and murder victims. They also had a private investigator on contract to do other law-violating things, and they had a bribery budget that would make most American newspaper publishers jealous. Once Murdoch’s British newspaper empire faced civil, criminal and Parliamentary inquiries, they went on an email-destroying binge. They have since become much more cooperative, but deleting half a terabyte worth of emails to and from executives and destroying computers used by journalists under investigation is really not a sound legal strategy.

James Murdoch, still the News Corp. heir apparent, has written a note of apology to members of Parliament. He owes them an apology because the recoverable emails among the deleted cache strongly indicate that he lied to Parliament about his awareness of the extent of phone hacking. James has also essentially fled the country, having resigned from his father’s British newspapers company and taken a job at his American-based international pay television company.

Meanwhile, British Prime Minister David Cameron is in the middle of his well-publicized state visit to the United States. Barack Obama has taken him to a “basketball match,” which Cameron found “hard to follow.” The right-leaning U.K. papers have been extremely overexcited in their coverage of the PM’s visit, because, again, national insecurity.

Cameron was surely thrilled to be out of the country when the Brookses got collared. They’re neighbors and close personal friends. Charlie Brooks and Cameron go way back — they attended Eton together, and as equally ridiculous posh stereotypes they got along famously — and earlier this month it was revealed that Cameron had ridden a retired police horse that the Met had for some reason given to Rebekah Brooks. (The only way the ensuing scandal could’ve been more British is if it had involved a Tory MP and a dominatrix.)

Speaking of horses, Charlie Brooks has one running in a race today. As the Guardian noted, he had a column published the day he was arrested in which he said, tragically, that “the happiest moment of my year is about three hours before the first race at Cheltenham on Tuesday.”

As for old Rupert himself, he hasn’t tweeted anything since Saturday. But he assured employees at the Sun that they’re in the clear, and he’s headed to London to perform damage control. His British newspapers hold a special place in his heart, making it a bit poignant — or hilarious, depending on your perspective — that that tiny arm of his vast international empire is the one that is currently destroying everything he’s spent a lifetime building.

That touched off a storm of public outrage that rocked Murdoch’s media empire and ricocheted through Britain’s political, police and media establishments.

“Nothing that has been agreed will ever bring back Milly or undo the traumas of her disappearance and the horrendous murder trial earlier this year,” the Dowlers said in the statement. “The only way that a fitting tribute could be agreed was to ensure that a very substantial donation to charity was made in Milly’s memory. We hope that projects will be undertaken so that some good can come from this.”

Murdoch met with the Dowlers in July to personally apologize to the family, saying he was “appalled” to have discovered what happened.

In the statement Friday, he said he hoped something positive can be done in memory of Milly.

“The behavior that the News of the World exhibited towards the Dowlers was abhorrent and I hope this donation underscores my regret for the company’s role in this awful event,” he said.

The revelation that reporters eavesdropped on Milly Dowler’s voice mail messages while police were searching for her — and mounting evidence that phone hacking was routine at the newspaper — scandalized the British public.

In a letter to lawmakers disclosed Thursday, Surrey Police Chief Constable Mark Rowley acknowledged that his force knew as far back as April 2002 that someone working for the News of the World had accessed Dowler’s voice mail, giving false hope to the missing teen’s family and potentially interfering with the investigation into her disappearance.

The phone hacking scandal has forced the resignation of two of London’s top police officers, ousted executives at Murdoch’s News Corp. and claimed the job of Prime Minister David Cameron’s former spin doctor, Andy Coulson, an ex-News of the World editor.

Murdoch’s global News Corp. has expressed contrition, launched an internal inquiry and set aside 20 million pounds ($32 million) to compensate victims, who could number in their hundreds.

Still, the News Corp. CEO is under pressure. On Friday, he will face shareholders with small stakes in his company for the first time since the phone-hacking scandal broke in July.

British lawmaker Tom Watson, one of Murdoch’s fiercest British critics, traveled to Los Angeles to attend the annual general meeting and has said he plans to use the event to reveal new details of what he claims are covert surveillance techniques by company employees.

_____

Associated Press writer Jill Lawless contributed to this report.

_____

Cassandra Vinograd can be reached at http://twitter.com/CassVinograd

“I’ve been asked to remind you all again that they are separate channels and the more we make FBN look like FNC the more of a disservice we do to ourselves,” Magee said in the memo dated October 5, carrying the subject line “Fox News and Fox Business.”

“I understand the temptation to imitate our sibling network in hopes of imitating its success, but we cannot,” Magee went on to say in the memo. “If we give the audience a choice between FNC and the almost-FNC, they will choose FNC every time. Earnings, taxes, jobs etc give us PLENTY to chew on.”

As Media Matters ably documents here, Fox Business is right now just a sort of weird alternate-Fox News, with slightly different personalities who are still fixated on the exact same right-wing causes and phony outrages. (Plus cantankerous Connecticut cowboy Don Imus in the mornings, which is an odd choice for a “business” channel.) It’s Fox’s ESPN 2, except without extreme sports.

Why would an investor or trader want to watch Eric Bolling interview Pam Geller about the “ground zero mosque”? Who turns on a “business news” channel hoping to see former Wall Street Journal editorial writer David Asman promote birtherism and interview an ex-NFLer about the dangers of gay marriage?

The problem with Fox Business is baked right into the channel’s founding: It serves a market that is totally satisfied with preexisting offerings. People who want conservative-slanted market news all day already had a channel: CNBC. Just about everything Fox Business has ever done is either a retread (sexy ladies talk about stocks, just like on CNBC!) or just stupid (a five p.m. show set in a weird fake Irish pub!). While CNBC flatters its viewers’ senses of sophistication and superiority, Fox Business assumes its audience would rather watch an interview with Tila Tequila than hear about the SEC’s decision to charge Goldman Sachs with fraud.

The Fox model doesn’t work with business news, where the pro-corporatist mind-set is already baked into the majority of “objective” coverage and there isn’t a need to spice up the mundane business of promoting the interests of the wealthy with culture war material. Fox Business should be targeting the conservative elites who find Muslim-bashing and birtherism a bit distasteful (if necessary). But those elites may never find a reason to tune in. News Corp’s own Wall Street Journal has an exclusive deal with CNBC, and WSJ reporters are just as turned off by the Fox Business brand as everyone else.