Cameron: I would have accepted Brooks’ resignation

The Prime Minister has called for “specific action” on “illegal and unacceptable practices” following the phone hacking scandal that led to the collapse of the News of the World.

He said a judge would be appointed to run an independent inquiry into how the scandal was allowed to happen.

“No stone will be left unturned,” Mr Cameron promised.

A second inquiry would be held to examine the ethics and culture of the press in light of the failure of the the Press Complaints Commission.

Mr Cameron also said the police watchdog the IPCC has been called in to oversee an investigation into allegations that the Met police took payments, and that there would be no repeat of a failed 2006 investigation, which was “clearly inadequate.”

Talking about some of the key individuals embroiled in the scandal, Mr Cameron indicated he would have accepted the resignation of Rebekah Brooks were the decision up to him, after she reportedly offered to stand down as News International’s chief executive.

His comments came as Andy Coulson, former Downing Street communications chief and ex-News of the World editor, was arrested on suspicion of phone hacking and corruption. The 43-year-old has been held at a south London police station this morning, sources said.

Mr Cameron said that Coulson resigned from Number 10 because of things that happened “on his watch” at the News of the World.

“I gave him a second chance, and it didn’t work out, it was my decision to hire him and my decision alone and I take full responsibility for it,” he said.

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Coulson resigned in January as Downing Street’s communications chief, saying the allegations about illegal eavesdropping under his editorship was making his job impossible.

Labour leader Ed Miliband urged Mr Cameron to apologise for an “appalling error of judgement he made in hiring Andy Coulson.”

He said the PM should put things right by “apologising for bringing him in to the centre of the government machine. Coming clean about what conversations he had with Andy Coulson before and after his appointment about phone-hacking.”

It comes after James Murdoch, chairman of publisher News International, said the 168-year history of Britain’s best-selling newspaper would come to an end when the final edition was published on Sunday.

The paper will be shut down after claims that it paid private investigators to illegally intercept the voicemail messages of murdered schoolgirl Milly Dowler, bereaved military families and relatives of 7/7 bombing victims.

News Corporation owner Rupert Murdoch made it clear that some people would lose their jobs as a result of the paper’s closure.

He told staff: “Many of you, if not the vast majority of you, are either new to the company or have had no connection to the News of the World during the years when egregious behaviour occurred. I can understand how unfair these decisions may feel.”

Earlier, Mr Cameron ordered two public inquiries into the scandal, one looking at failings in the original police inquiry and the second examining the behaviour, practices and ethics of journalists and media organisations.