The younger Murdoch’s credibility was tested last week, after he told a parliamentary committee that he was not aware of evidence that eavesdropping at the News of the World went beyond a jailed rogue reporter. At least three former top executives, including a former editor, have pointed fingers back at James. What happens next is critical to his future.

The allegations raise questions not only about his succession to the helm of the media empire, but about what he may have relayed to Rupert Murdoch, the CEO, controlling shareholder and dad.

James Murdoch has stood by his testimony, but Prime Minister David Cameron joined opposition lawmakers, and some shareholders, in demanding answers last Friday.

Media analyst Steve Hewlett pretty much sums it up:

If it emerges that he knew the details of what he was signing, then he’s in trouble. But if he knew absolutely nothing about why he was signing away so much money, then another question arises, as to whether he is competent to run the business, and whether he is a worthy successor to his father.

Late last week Colin Myler and Tom Crone, News of the World’s most recent editor and its long-time top lawyer, said they told James Murdoch in early 2008 of a crucial email suggesting phone hacking went beyond a single journalist, contradicting the company line, put forward by James, that he didn’t know its extent.

A third man, Jon Chapman, the former director of legal affairs at News International, has also indicated this weekend that he wants to correct “serious inaccuracies” he claims were aired at the hearing.

It’s also a big week for BSkyB when the pay-TV company, which James chairs and in which News Corporation holds a 39 percent stake, announces its financial results.

This from the Wall Street Journal:

On Thursday, the board of British Sky Broadcasting Group PLC will meet two weeks after the scandal prompted News Corporation to withdraw its bid for the 60.9 percent of the satellite-TV broadcaster it doesn’t already own.

The meeting is expected to provide the strongest signal yet of whether the BSkyB board will continue to support James Murdoch as the company’s chairman.

It’s also important to note here that British communications regulator, Ofcom, is still studying whether, after the hacking revelations, News Corporation remains “fit and proper” to hold a broadcasting license for BSkyB.

The UK parliamentary committee that’s been investigating what senior News Corporation executives knew about phone hacking, and when they knew it, are due to meet this Friday.

By this time, James will have needed to provide them with both further written information on the scandal and clarify parts of his testimony that have been called into question.

[Source: WallStreetJournal]