Tabloid phone hacking scandal spreads, former Cameron aide arrested

A scandal that started with revelations that the Sunday tabloid the News of the World had hacked into the cellphone of a missing teenage girl has spiraled into a political crisis for the government of British Prime Minister David Cameron and a business nightmare for media tycoon Rupert Murdoch.

Mr. Murdoch's decision to close the paper at the center of the storm, announced by his son James yesterday, has not put the scandal to bed.

Today, Andy Coulson, a former NotW editor and the prime minister's senior media adviser until he stepped down from his post in January, was arrested. What's more, the government is planning wide-ranging changes to media regulation, and a massive television buyout by Murdoch's News Corporation that appeared set to gain government approval a week ago is now in doubt.

The closure of the 168-year-old News of the World, the world’s best-selling English language newspaper, followed a successful Internet campaign to encourage advertisers to withdraw from the newspaper. At around 11 a.m., British police confirmed they had arrested Mr. Coulson, who edited NotW at the time of the alleged phone hacking.

Coulson's arrest could prove a political challenge for Mr. Cameron. Coulson resigned as Cameron's communications chief when new allegations emerged that he knew about phone hacking at the paper while he worked there. He resigned as editor following the 2007 conviction of a NotW reporter and private investigator for hacking into the cell phone of Prince Harry, saying he took responsibility but didn't know what the two men had been up to. He then took up a job on the Conservative Party's staff. When Cameron won the premiership, Coulson followed his good friend into government.

Cameron told reporters he had a series of conversations with Coulson between his NotW resignation and joining the Conservative Party’s staff. Responding to claims he had been warned Coulson's appointment could be troublesome, the prime minister said: “No one gave me any specific information. Obviously I sought assurances, I received assurances. I commissioned a company to do a basic background check, but I'm not hiding from the decision I made.”

World keeps turning

All the while, the news of the NotW scandal keeps evolving.

The newspaper’s former “royal correspondent” Clive Goodman, who served four months in prison for illegally intercepting royal phone calls, was also re-arrested today.

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