Mr James Murdoch has stepped down as the Chairman of satellite broadcaster British Sky Broadcasting, BSkyB, in the latest fallout of the phone hacking scandal.

Mr James Murdoch is the younger son of Mr Rupert Murdoch, the founder of News Corporation.

He will continue as a non-executive director, and be succeeded as Chairman by a current director of the group, Mr Nicholas Ferguson, BSkB's Board said in a statement on Tuesday.

The younger Mr Murdoch has been under growing pressure over the extent to which he knew details of alleged phone hacking at now closed The News of the World newspaper.

Mr Murdoch has denied knowing about the allegations, arguing that he hadn't fully read an email sent to him by a senior executive with details suggesting it was more widespread, but the controversy has refused to die. Media regulator Ofcom, which was investigating the suitability of both Mr Murdoch and News Corp for holding a broadcasting licences, recently widened its probe to include BSkyB's suitability.

Mr Murdoch said he was stepping down to prevent the controversies from becoming a “lighting rod” for BSkyB.

“As attention continues to be paid to past events at News International, I am determined that the interests of BSkyB should not be undermined by matters outside the scope of this company,” Mr Murdoch said on Tuesday.

Two months ago he stepped down as Chairman of News International, News Corp's British newspaper division, moving to its US pay television business, in a move seen as an attempt to distance him from the controversy.

It comes ahead of a crucial report by the House of Commons Culture Media and Sport Committee, due out later this month, which could raise more questions about the role Mr Murdoch played.

He is also set to give evidence in front of the Levenson Inquiry into media abuses in Britain later this month.

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