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Murdoch flying to UK to reassure staff; Sun on Sunday still on but is newspaper spin-off an option?

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By Noel Young, Correspondent

February 11, 2012 | 7 min read

Rupert Murdoch is flying to London this week to reassure staff he has NO plans to close or sell the Sun , says his American flagship paper, the Wall Street Journal, quoting "a person familiar with the situation"- and plans for a Sunday version of the paper , a possible Sun on Sunday, are still on, said this person.

The Sun: staff arrests reach 9

Speculation had been growing in Britain that the Sun might suffer the same fate as the News of the World, shuttered over the phone hacking scandal, after five senior Sun journalists, including the newspaper's deputy editor, were arrested at the weekend over allegations of inappropriate payments to police and public officials.

All were released on bail late on Saturday without charge. Four Sun people arrested two weeks ago, have also been released on bail without charge.

But even with 80-year-old Murdoch telling staff the paper will carry on, the WSJ in a later report concedes that "the arrests may revive a Wall Street debate on whether News Corp. should spin off its newspaper business as a separate company."

The Journal added, "While News Corp. was founded on newspapers, they now play a relatively small role in what has become primarily a television-and-film conglomerate.

The paper quoted Michael Morris, an analyst at Davenport & Co as saying, "I see no logic to maintaining the newspaper business within a consolidated News Corp."

Resistance from Rupert Murdoch had killed any prospect of a spinoff in the past, people familiar with the situation told the WSJ.

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Earlier Rupert Murdoch had reassured staff in London of his commitment to the Sun. In an internal memo , chief executive Tom Mockridge said he had a 'personal assurance' from Rupert Murdoch that he plans to continue to own and publish The Sun.

Writing in today’s Sun, its former political editor, Trevor Kavanagh, questioned the proportion of police resources being used in the inquiry and warned that the heavy handed police tactics left it looking like a “witch hunt”.

The Telegraph reported staff at the paper were calling many of the allegations “pathetic” and related to matters many years ago where reporters had bought drinks for contacts in the pursuit of legitimate stories.

In a sign that News Corp. may view the arrests as excessive, said the WSJ, Mockridge added that he had "today written to the Independent Police Complaints Commission to seek clarification from them about the process of independent oversight of the police investigation."

News Corporation, the parent company of News International said its Management and Standards Committee had provided information leading to the arrests. The company said it was also offering "immediate legal representation" to those arrested.

The five held were deputy editor Geoff Webster, picture editor John Edwards; chief reporter John Kay; chief foreign correspondent Nick Parker; and reporter John Sturgis. The Guardian described the arrests as the Sun's "worst-ever crisis."

A News International source said Sun editor Dominic Mohan was "not resigning" but added that it was "obviously a dramatic day for him".

In a statement later he said : I'm as shocked as anyone by today's arrests but am determined to lead The Sun through these difficult times.

"I have a brilliant staff and we have a duty to serve our readers and will continue to do that. ."

The Daily Mail said on its website that the surprise move by police came on a day when nearly all Sun staff were out of the paper's offices. The Mail added, "The latest police action is likely to cast uncertainty over the future of the paper, after the closure of the News of the World in July in the wake of the phone hacking scandal."

Also held on Saturday : A Surrey police officer, 39, a woman MoD employee, 39, and a member of the armed forces, 36. They were held on suspicion of corruption, misconduct in a public office and conspiracy in relation to both. They too were later released on bail without charge.

All eight arrests were part of the Operation Elveden probe into payments to police. but, said the BBC, the arrests "marked a widening of the operation to include suspected corruption involving public officials who are not police officers. " BBC News correspondent Joe Lynam said Sun employees he had spoken to were concerned there was something of a "witch-hunt".

The NUJ has accused Murdoch of throwing his journalists to the wolves in a bid to save his company, adding that the reputation of those arrested will "inevitably" be damaged. General secretary Michelle Stanistreet said News International staff were reeling and furious at "what many sense to be a witch-hunt" and "a monumental betrayal on the part of News International".

News Corporation said it "remains committed to ensuring that unacceptable news-gathering practices by individuals in the past will not be repeated and last summer authorised the company's Management Standards Committee to co-operate with the relevant authorities."

"The MSC will continue to ensure that all appropriate steps are taken to protect legitimate journalistic privilege and sources, private or personal information and legal privilege.

"News Corporation maintains its total support to the ongoing work of the MSC and is committed to making certain that legitimate journalism is vigorously pursued in both the public interest and in full compliance with the law."

The MoD refused to comment, said the Guardian .

Operation Elveden runs alongside Scotland Yard's Operation Weeting team, launched as the News of the World phone-hacking scandal erupted last July .

The homes of all eight people detained on Saturday were searched as were the offices of News International in Wapping, the police said.

The previous batch of arrests on January 28 included Fergus Shanahan, 57, who was Rebekah Brooks’ deputy during her editorship of The Sun from 2003 to 2009.

The other three were Graham Dudman, 49, promoted from Sun assistant editor role to managing editor under Mrs Brooks in 2004, Chris Pharo, 42, promoted by Mrs Brooks to head of news in 2007, and Mike Sullivan, 48, the paper’s crime editor.

The four are on bail until dates in April and May. No-one has been charged.

At the time a source familiar with News Corporation’s MSC, set up last July to oversee the company’s response to the police investigation, said : “This is a mark of the absolute determination of News Corporation to drain the swamp.”

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