News Corporation is to close its scandal-ridden British tabloid News of the World, as the public backlash against phone hacking allegations continued to mount.

“This Sunday will be the last issue of the News of the World,” Mr James Murdoch, Chairman of News International, said in a statement on Thursday. The final paper will run no commercial advertisements, and any advertising will be donated to causes and charities.

The latest development came as News Corporation’s attempt to take over satellite broadcaster BSkyB suffered a blow on Thursday, amid reports that the Government would delay its decision on the bid to September.

A huge surge in public responses to a Government consultation on the takeover — due to close on Friday — will mean the Culture, Media and Sport Committee won’t be able to make a decision until then at the earliest, according to reports in several media, including Sky News itself.

News Corp is attempting to fully acquire the broadcaster in which it currently owns a 39.1 per cent stake. A Government decision had been expected in the next few weeks.

Around 100,000 people are estimated to have written in to the Culture, Media and Sport department consultation, amid the latest allegations against the paper, which include payments to senior police offices, and hacking the phones of victims of the 2005 London terrorist attacks.

The Prime Minister has pledged public inquiries, into those already being carried out by Scotland Yard, though it has done little to assuage the public anger. A number of the paper’s biggest advertisers such as supermarket Sainsbury’s and mobile phone operator 02 have also pulled out, pending the investigations.

The uproar has forced Mr Rupert Murdoch himself to break his silence on the matter. He described the allegations as “deplorable and unacceptable” and has pledged to fully cooperate with police investigations.

“We have made mistakes,” said Mr James Murdoch in his statement, adding that the company would do their utmost to fix, atone for them and ensure they didn’t happen again.

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