James Murdoch set to run News Corp's U.S. Fox TV business

James Murdoch is reportedly being lined up to run News Corporation's Fox TV business in the US despite being sharply criticised by British broadcasting regulator Ofcom on Thursday.

The role being discussed would put him in charge of the Fox Networks Group, which includes the Fox terrestrial TV network as well as cable channels such as FX and National Geographic, says a report in the Financial Times.

Murdoch had hoped the promotion, which would return him to pole position to take over from his father and to run the TV business when News Corp demerges it from its newspapers next year, would have been announced in July.

Sources told the FT that the new role had been formalised but Rupert Murdoch resisted the announcement.

Another source cited said that News Corp could not countenance announcing the expanded role in July until there was a better idea about what would happen in London, where potentially damaging Ofcom and Leveson inquiry reports were still on the horizon.

On Thursday, Ofcom declared BSkyB "fit and proper" to own broadcast licences, but the regulator was highly critical of James Murdoch's handling of the phone-hacking scandal.

It found that Murdoch's conduct in relation to News Group Newspapers "repeatedly fell short of the conduct to be expected of a chief executive and chairman" and that his lack of action in relation to phone hacking was "difficult to comprehend and ill-judged".

If Murdoch ascends to the new role, there would be a new reporting structure at News Corp with Peter Rice, the Los Angeles-based head of News Corp's lucrative Fox Networks, reporting directly to him.

Rice was promoted to this role in July and Murdoch had hoped his father would rubber stamp the deal then.

The move gave Rice control of all programming of the Fox Networks Group, including Fox Sports, Fox International and National Geographic channels. However, Fox News, run by Roger Ailes, remains a separate business.

In London, the phone-hacking scandal and its fallout will continue to cast a shadow over News International for some time. Lord Justice Leveson's final report on the future of press regulation is still to come, there are several hundred more civil damages cases to settle next year, and the Metropolitan police investigations into alleged criminality at the publisher and any resulting prosecutions could continue for up to three more years.

Tensions are running high at Murdoch's favourite paper, the Sun, over the mounting number of arrests of journalists. On Thursday afternoon, the chief executive of News International, Tom Mockridge, called an unexpected staff meeting to try to boost morale.

The meeting was called after the third Sun journalist in two days was arrested in relation to Operation Elveden, the Met police inquiry into alleged payments to police and other officials for stories, and to Operation Tuleta, the police investigation into alleged computer hacking which was recently widened to include alleged criminal breaches of privacy.

In all, 21 journalists at the Sun have now been arrested.

According to one staff member who was at the meeting, Mockridge is very uneasy about the continuing role of the management and standards committee, the internal inquiry unit that set up by News Corp to clear Wapping of all alleged criminal practices.

Mockridge told Sun staff that he had "no date" for when the arrests would end and said the company continued to co-operate with the Metropolitan police, as agreed by parent company News Corp.

He said it was up to News Corp, not News International, to decide when to end co-operation with the police.

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