Murdoch drama ignites fresh talk of papers sale

News Corp chief operating officer Chase Carey poured oil on the fire by publicly admitting the company had considered a sale or spin-off of the titles including the Sun and The Times. He told US investors "there certainly is an awareness" that the company would be worth more if it did not own the papers.

Carey admitted he had held talks with News Corp executives about a sale or spin-off following the News of the World phone hacking scandal.

However, analysts poured cold water on the idea that the company was poised to jettison the operation.

Speculation has been fuelled by the exit of Rupert Murdoch's son, James, which some observers claimed meant the family was loosening its ties with the UK newspapers.

But Claire Enders, founder of Enders Analysis, said Carey's comments were expected and that News Corp remains committed to the papers, pointing out it has invested an estimated $50 million
(£31.3 million) in the launch of The Sun's Sunday edition.

Enders said: "I really don't think the idea that Rupert Murdoch launches The Sun on Sunday and by Thursday there's a long-term plan to get rid of the newspapers makes any cognitive sense."

News Corp also owns The Wall Street Journal, the New York Post and a string of papers in Australia. However, publishing only contributes around 15% of profits at News Corp. Cable and pay TV and movies, including interests in Fox and BSkyB, generate the vast majority of income, prompting some investors to call for the papers to be sold.

News Corp shares have recovered all their losses since the hacking scandal exploded in July.

However, there remains the threat of a full-scale investigation by US authorities which could yet force News Corp to re-examine the future of the papers. James Murdoch also remains under pressure as chairman of BSkyB.

Crispin Odey, founder of Odey Asset Management and a leading Sky shareholder, said that James' role looked in doubt following his exit from News International.

"Is his heart going to be in Sky any more? Probably not," said Odey. "There is definitely change afoot."

Sky's board backed James Murdoch at the general meeting in November, although as many as 45% of independent shareholders abstained or voted against him.