Rupert Murdoch has accepted the resignations of News Corp's top two newspaper executives, Rebekah Brooks and Les Hinton.
The US-based media magnate also made a personal apology on Friday to the parents of a murdered schoolgirl in what appeared to be an admission that the News of the World, then edited by Brooks and overseen by Hinton, had in 2002 hacked into the voicemails of their missing daughter.
It was that damning allegation, in a rival newspaper 10 days ago, which reignited a five-year-old scandal that has forced Murdoch to close the News of the World, Britain's best-selling Sunday paper, and drop a $12bn plan to buy full control of highly profitable pay-TV operator BSkyB.
With the departures of Brooks, a 43-year-old veteran of the company, and Hinton, the top executive of Dow Jones, publisher of the Wall Street Journal, attention will now turn to Murdoch's son and presumed successor, James.
A direct apology from Murdoch, who has been summoned to answer questions before a parliamentary committee next Tuesday, was carried in all British national newspapers on Saturday under the headline "We are sorry".
The apology contained the following message and was signed by Murdoch himself: "The News of the World was in the business of holding others to account. It failed when it came to itself.
"We are sorry for the serious wrongdoing that occurred. We are deeply sorry for the hurt suffered by the individuals affected.
"We regret not acting faster to sort things out. I realise that simply apologising is not enough. Our business was founded on the idea that a free and open press should be a positive force in society. We need to live up to this.
"In the coming days, as we take further concrete steps to resolve these issues and make amends for the damage they have caused, you will hear more from us. Sincerely, Rupert Murdoch."
'Apologised many times'
Earlier on Friday, Murdoch met parents of Milly Dowler, a 13-year-old abducted in 2002 and found murdered six months later.
Police are investigating whether someone engaged by the News of the World not only listened in to the missing teenager's cellphone mailbox but deleted some messages to make room for more.
That misled police hunting for her and gave her parents false hope that their daughter might still be alive.
"He apologised many times," Mark Lewis, the Dowler family lawyer, said. "I don't think somebody could have held their head in their hands so many times to say that they were sorry."
Alastair Campbell, communications director for ex-PM Tony Blair, discusses the scandal
Brooks was the most senior executive at News International, a subsidiary of the US-based News Corp, which Murdoch heads, and is a former editor of both The Sun and the News of the World.
News International also publishes The Times and The Sunday Times.
Prior to the announcement of Brooks' resignation, Murdoch had pledged that she had his total support.
News of the World printed its final edition on Sunday , and about 200 hundred journalists were laid off as News International struggled to respond to the scandal.
But others within the Murdoch establishment had become increasingly critical of Brooks' ongoing leadership.
Elisabeth Murdoch, Rupert Murdoch's daughter, called on Brooks to resign on Thursday, as did a major shareholder at News Corp, Prince Alwaleed bin Talal, the Saudi billionaire.
"For sure she has to go, you bet she has to go," Alwaleed told the BBC. His Kingdom Holding is the second biggest shareholder in News Corp and controls seven per cent of the votes.
In a statement, Brooks thanked Murdoch for his "kindness and incisive advice".
"As chief executive of the company, I feel a deep sense of responsibility for the people we have hurt and I want to reiterate how sorry I am for what we now know to have taken place," she said.
Brooks is due to answer questions in front of a UK parliamentary committee investigating phone hacking at the News of the World.
Murdoch also bowed to pressure to appear before the committee after David Cameron, the UK prime minister, said on Thursday he should attend and the committee said it would issue a summons compelling him to do so.
He told the Wall Street Journal, a News Corp title, that he had agreed to appear after being told he would be summoned, and in order to address "some of the things that have been said in parliament, some of which are total lies".
Murdoch's son, James Murdoch, News Corp's top executive in Europe, will also face questioning. The committee will begin hearings next week.
Murdoch, 80, has already been forced to back down on his plan to acquire BSkyB, the satellite television operator in which News Corporation has a 39 per cent stake, due to an outcry over allegations that reporters accessed private phone messages.
The hacking victims include celebrities, senior politicians, members of the British royal family and relatives of British servicemen killed in Iraq and Afghanistan.
Cameron has appointed a judge for a wide-ranging inquiry into the News of the World scandal and wider issues of media regulation.