Rupert Murdoch, chairman of News Corp, denounced the alleged phone hacking at one of his British tabloid newspapers as “deplorable and unacceptable” as investors took fright at the reputational damage being inflicted on the global media group.

Shares in News Corp fell 5.1 per cent by lunchtime in New York as shareholders feared that the political firestorm enveloping the News of the World newspaper could jeopardise the group’s chances of taking full control of its highly profitable UK satellite broadcaster, British Sky Broadcasting.

During a heated parliamentary debate, David Cameron, Britain’s prime minister, announced two public inquiries into the phone hacking scandal that has triggered public outrage and shaken his coalition government. “It’s absolutely disgusting what has taken place. I’m sure everyone in this house, indeed this country, will be revolted,” he said.