James Murdoch resigned as chairman of News International (NI) on Wednesday afternoon.

James Murdoch [File photo]

A statement on the website of News Corporation (NC), the parent company of NI, announced that the 39-year-old son of international media mogul Rupert Murdoch was standing down from the post of chairman of embattled NI, and becoming the deputy chief operating officer of NC.

"News Corporation today announced that, following his relocation to the company's headquarters in New York, James Murdoch, deputy chief operating officer, has relinquished his position as executive chairman of News International, its UK publishing unit," the statement said.

The statement continued, "Tom Mockridge, chief executive officer of News International, will continue in his post and will report to News Corporation president and chief operating officer Chase Carey."

James Murdoch is the son of Rupert Murdoch, the 80-year-old Australian-born owner and now American citizen who owns NC.

He said, "News International is now in a strong position to build on its successes in the future. As deputy chief operating officer, I look forward to expanding my commitment to News Corporation's international television businesses and other key initiatives across the company."

NI has suffered serious damage to its reputation under the control of James Murdoch, with the British government launching the Leveson Inquiry, a judicial inquiry into the ethics and practices of the British press, which was prompted by the illegal activities of journalists and of private investigators employed by one of NI's flagship newspapers.

In addition British MPs on the Media Culture and Sport Committee of the House of Commons twice called James Murdoch to questioning sessions in their separate inquiry into the activities of newspapers under his control.

The extent of the criminal activity which has already seen a journalist and a private investigator jailed in 2007 for hacking the phone of Prince William, took place before James Murdoch became chairman of NI in 2007.

However, he has been criticized for managerial mistakes in handling further allegations of wrongdoing, which began with the admittance that NI journalists from the News of the World had hacked into the phone of a teenage, female murder victim.

The extent of public disgust at this act prompted the closure of the NOTW, a Sunday newspaper that led its market and had been published for 168 years.

Further police investigations into the activities of NI journalists on the NOTW's sister daily newspaper, The Sun, has led to the arrests of 22 people including some of its journalists who are alleged to have been involved in paying government employees, including policemen and officials, for tip offs.

The NI operations of NC are a relatively minor part of the media empire, which makes 70 percent of its operating income from its television operations, and the phone-hacking scandal has prompted questioning over whether NC will continue to think it worthwhile retain control of NI.

Rupert Murdoch last Sunday personally oversaw the launch of a new Sunday newspaper, The Sun on Sunday, from London.