War in Wapping: The Sun arises – and the press bites back

After months of unremitting criticism, journalists came out fighting after the arrest of five colleagues – and Rupert Murdoch blinked

Apart, obviously, from Wendi, his coil-sprung wife, Rupert Murdoch has two great loves. One is News Corp, the multibillion-dollar business he has dedicated his life to creating, which gives him power and money. The other is The Sun, the swaggering red-top he bought in 1969, 10 years before he created News Corp, which embodies everything he loves about journalism: gossip, scandal and the ability to stick two fingers up to the establishment.

Over the past 33 years, these two passions have shared a single trajectory, as News Corp is the ultimate owner of The Sun. But as of last week, their paths have diverged dramatically, and Mr Murdoch has been forced to decide which he loves more. The Sun has become engulfed in a toxic scandal over allegations its staff have paid police officers for stories, and shareholders in New York, where News Corp is based, are anxious. Andrew Neil, a former editor of The Sunday Times who worked for Mr Murdoch for 11 years, says power and money will win out, and predicts Mr Murdoch will cut the paper loose.

That's certainly how it looked last weekend, when staff at The Sun accused Mr Murdoch of throwing them to the wolves, after five senior staff members were arrested in dawn raids. But in a week that has seen an extraordinary civil war open up at News International, the UK division of News Corp, culminating in Mr Murdoch arriving in an attempt to pacify all sides on Friday, nothing about the future of Britain's biggest-selling newspaper can now be said to be certain.

To anyone outside Fleet Street, the internal politics of a newspaper are generally of little interest. Over the past eight months, the press has been writing about itself more than ever, since allegations of phone hacking at the News of the World prompted the paper's closure in July, triggering investigations into media standards, most notably the Leveson inquiry. After the MPs' expenses scandal and the outcry over bankers' bonuses, it looked as if it was time for journalists to take their turn in the stocks.

And for much of the past eight months, few could dare to complain. The hacking of a murdered schoolgirl's voicemail was so distasteful that, even if you thought subterfuge was justified for other stories that really were in the public interest, you kept quiet. But last week's events at Wapping now signal the start of a fight-back. The most obvious indication of this was the astonishing announcement that an entirely new Murdoch paper was to be born, The Sun on Sunday, rumoured since the demise of the NOTW. Mr Murdoch made it official by telling staff in an email it would be on newsstands "within weeks".

The second fillip was his announcement that the 10 staff who had been arrested and suspended from work were welcome to come back. To many, this was much more significant, because it showed that even if the police suspected them of being criminals, their proprietor believed them innocent until proven otherwise.

The problem, of course, is that they may be found to have paid police officers for stories, which is illegal. The former Sun editor Kelvin MacKenzie yesterday defended the practice, recalling his own habit of giving the police bottles of whisky when he was a cub reporter on a local paper. He argued that officers were only passing on information that his readers were "entitled to know". The problem for Sun journalists may be that it wasn't just crime stories they were buying, but celebrity tittle-tattle, which might struggle to find a public interest justification. In any case, there's no flexibility in the law: paying police officers for anything is illegal.

A new hate figure emerged out of last week's war at Wapping in the form of Will Lewis – the NI man helping the police with their investigations, which led to the arrests. He's the prize-winning ex-editor of The Daily Telegraph, who led the paper's exposure of the expenses scandal, before leaving to become an executive at News International in the summer of 2010. It's an irony not lost on many that the man reviled by MPs for heaping them with ordure is now doing the same to journalists. For last July, he was appointed to head the Management and Standards Committee, an internal but independent unit within News International, which is now wading through 300 million emails and selecting evidence of wrong-doing to hand to the police.

When he took on that role, Mr Lewis was given effectively the same choice Rupert Murdoch is now faced with: between loyalty to News Corp, and to its UK newspapers, which include The Times and The Sunday Times. What became brutally evident last week was that Mr Lewis has chosen News Corp. The arrests were almost calculated to drive a stake through The Sun, because they targeted journalists with among the most loyal following at The Sun.

While Mr Lewis is not flinching from the task at hand, his willingness to hand over confidential information to the police has opened him to accusations of hypocrisy. He has never disclosed the identity of the source to whom he paid £150,000 for the stolen expenses CD, which was smuggled out of the House of Commons. When he gave evidence to the Leveson inquiry, he said: "Core to any journalist – and I'm included – is the protection of journalistic sources, whether they're my sources or someone else's sources."

And yet the MSC, led by Mr Lewis, has plainly compromised sources in its handing over of evidence to the police, so much so that the chairman of the Lords communications committee spoke out. "The employer does have a very important role in the protection of whistleblowers," said Lord Inglewood, after his committee published a 79-page report on the future of investigative journalism on Thursday. "A proper employer protects the acts of a responsible journalist and his sources."

Mr Lewis may have ended last week as a greater bogeyman than Rupert Murdoch, but only because he has entirely embraced the culture of ruthlessness that caused this scandal in the first place. As Andrew Neil said: "You create a climate in which people think it's all right to do certain things, and I would argue that Rupert Murdoch, with his take-no-prisoners attitude to tabloid journalism, the end will justify the means, do whatever it takes, created the kind of newsroom climate in which illegal activities like phone hacking took place."

Since the closure of the News of the World, that climate of confidence at its sister paper has long gone. A sign still hangs over the entrance to the newsroom saying: "Hold your head up, you're entering Sun country." Now, spirits are finally lifting once again, but the future of Sun country remains far from certain.

Rupert Murdoch may have pulled off a brilliant trick by announcing a new newspaper, but it's done little to appease News Corp shareholders. Mr Murdoch has bought time, but the test of his two loves remains.

A week in 'The Sun'

Saturday 11 Feb Eight arrested in dawn raids and taken for questioning, including five Sun staff, bringing thetotal to 10.

Last Sunday Staff come in to Wapping to put out Monday's paper without key players. Amanda Platell accuses the left-wing media of obsessing on the story.

Monday Associate editor Trevor Kavanagh defends The Sun, saying the police have treated staff like terrorists.

Tuesday Former Sun columnist Richard Littlejohn likens Scotland Yard to the Stasi.

Friday Murdoch spends seven hours at Wapping, addressing executives and staff. Announces launch of The Sun on Sunday.

Wednesday Human rights lawyer Geoffrey Robertson says journalists must be allowed to protect their sources.

Thursday Rupert Murdoch flies into Luton from New York on his private jet.

Yesterday Former Sun editor Kelvin MacKenzie defends the journalistic practice of getting stories from police officers.