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A panel investigating the News of the World phone hacking scandal dropped a potential bombshell earlier today.  It looks like back in 2008, James Murdoch was part of an email chain discussing phone hacking at News of the World.

The e-mail chain was sent to the panel as part of an internal investigation by News International, the tabloid’s parent company. The e-mails contain warnings from lawyers that the phone hacking was more widespread than previously thought. The messages were passed on to the editor of The News of the World at the time, Colin Myler, who forwarded them to Mr. Murdoch, who replied within minutes, saying he would be available to discuss the matter.

The email, dated June 7, 2008; discusses a suit brought by British soccer players' union chief Gordon Taylor.  A lawyer that was part of the chain said that the suit could lead to a "nightmare scenario," as Taylor could have been able to prove that phone hacking was rampant at News of the World and not restricted to a "rogue reporter," as the paper claimed.  Editor Colin Myler forwarded it to Murdoch, requesting a meeting as soon as possible.

Murdoch fils claims he didn't actually read that email.  But this is belied by the fact he replied to Myler saying he would be available to discuss the matter.

BBC business editor Robert Preston thinks that Murdoch fils could be in for a world of hurt.

The problem for Mr Murdoch is that Mr Myler's email is short and very blunt about the importance of the email at the bottom of the chain, which is written by Julian Pike, a solicitor at Farrar & Co.

So here we have a News International lawyer referring to a "nightmare". And said horror is yet another email - now widely known as the "For Neville email" - that is regarded as prima facie evidence of phone hacking being more widespread than News International had said at the time.

I know this is all very confusing. But what does it all mean?

Well, it shows that Mr Murdoch was given the ability in June 2008 to get a grip on the phone-hacking scandal, via this email stream.

Had he read the email stream, Mr Murdoch would surely have gleaned that the News of the World faced the serious allegation that it had misled MPs about the full extent of phone hacking at the News of the World.

Preston puts it pretty bluntly--if the MPs don't buy Murdoch fils' story, at the very least he could be gone from BSkyB.

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