Judge to head News of the World hacking inquiry - Cameron
A judge will lead a public inquiry into the phone hacking scandal at the News of the World, the prime minister said.
David Cameron defended his decision to appoint Andy Coulson, the former News of the World editor, as director of communications, a job he later quit.
Labour leader Ed Miliband had called on the PM to apologise for the "appalling error of judgement" in employing Mr Coulson, editor from 2003 to 2007.
Mr Coulson is being held over hacking - he denies knowing it was happening.
Mr Coulson, 43, was arrested by detectives investigating allegations of hacking the phones of various people in the news and is also being questioned about corruption allegations.
Mr Cameron said: "I became friends with him and I think he did his job for me in a very effective way. He became a friend and he is a friend."
On Thursday News International shut down the News of the World following a spate of fresh revelations.
The 168-year-old tabloid is accused of hacking into phones of crime victims, celebrities and politicians. Police have identified 4,000 possible targets.
Mr Cameron said a second inquiry would look at the ethics and culture of the press and he also said the Press Complaints Commission (PCC) would be scrapped, adding: "I believe we need a new system entirely."
He also questioned the tenability of Rebekah Brooks as News International chief executive considering she was editor of the News of the World at the time of Milly Dowler's phone being hacked.
Mr Cameron said there had been reports she had offered her resignation and added: "In this situation I would have taken it."
In January 2007 the News of the World's royal editor, Clive Goodman, and a private investigator, Glenn Mulcaire, were both jailed for plotting to intercept voicemail messages left for royal aides.
The Guardian's editor, Alan Rusbridger, claims he warned Mr Cameron's team not to employ Mr Coulson.
However, Mr Cameron said Mr Coulson had said he was unaware of the phone hacking which had been going on during his tenure at the paper.
Asked if he had "screwed up" on the decision to employ Mr Coulson, Mr Cameron said: "People will decide."
He said: "I decided to give him a second chance but the second chance didn't work. The decision to hire him was mine and mine alone."
The prime minister said a company had been hired to run a "basic background check" on Mr Coulson before he was employed while the Conservatives were in Opposition.
The PM said: "At the time it looked as if a proper investigation had taken place, someone had gone to prison, and it seemed reasonable to give him a second chance."
Mr Cameron admitted politicians were to blame for "turning a blind eye" to bad practices in journalism.
He said this was a "genuine opportunity" and a "cathartic moment" both for the media and for politicians and he said the phone hacking scandal was a "black cloud" hanging over Fleet Street.
Asked about the decision to close the paper, Mr Cameron said: "What needs to change is not the name of the paper or the letterhead but the practices that go on. It's not for me to say which papers stay open or not."
Mr Cameron admitted politicians and the media had got a bit "cosy" but he added: "As a party leader you are bound to want to want a relationship with the media because you want to get your message over and if that means talking to the head of the BBC, the editor of the Guardian or Rupert Murdoch I will go out and do that."
He said the scandal showed the PCC was "ineffective and lacking in rigour" and there was a need for a new watchdog.
Mr Cameron said the judge-led inquiry would look into "why did the first police investigation fail so abysmally; what exactly was going on at the News of the World and what was going on at other newspapers?"
"Of course the bulk of this inquiry can only happen when the police investigation has finished. That is what the law requires," he added.
Asked about the takeover of BSkyB by Rupert Murdoch's News Corp, Mr Cameron said Culture Secretary Jeremy Hunt was following "the proper legal processes and procedures".
He said: "His role is to take the advice of independent regulators and, as his department have made clear this morning - given the events of recent days - this will take some time."
Staff at the paper have reacted with shock to news that it will be closed after this Sunday's edition.
Its political editor, David Wooding, said the closure came as a "bombshell".
Mr Wooding said 200 jobs would be lost due to the actions of a few people.