NEWSPAPERS from Rupert Murdoch's media empire illegally obtained details of Gordon Brown's bank account and medical records of his son's illness, it was claimed last night.
The dramatic allegations surrounding the former Prime Minister drag News International's Sun and Sunday Times into the News of the World phone-hacking scandal and have further undermined the media baron's bid to take full control of BSkyB.
The latest disclosures came as Culture Secretary Jeremy Hunt announced in parliament that he will refer the takeover bid to the Competition Commission.
Mr Brown was said to be "shocked" to learn that the Sun had obtained details of his son Fraser's cystic fibrosis, and that journalists had accessed his Abbey National bank account.
His wife Sarah wrote on Twitter: "So sad to learn all I am (learning) about my family's privacy – it is very personal and really hurtful if all true."
It also emerged yesterday that News International newspapers had paid a royal protection officer for information about the Queen, including her mobile phone number.
Police have reportedly warned Prince Charles and his wife the Duchess of Cornwall that their voicemail messages may have been hacked by the Sunday tabloid, which was shut down at the weekend.
There was also more scrutiny on the role of Scotland Yard in the scandal, with MPs demanding the resignation of Assistant Commissioner John Yates for allegedly "repeatedly lying" to them in 2009 when he said there was no need to reopen the hacking inquiry.
But the police also made it clear that they were furious over leaks of evidence in recent days which they said were now hampering their investigations.
Mr Hunt's announcement of referring the BSkyB deal to the Competition Commission followed a decision by News Corporation to withdraw its offer to hive off Sky News from BSkyB, which was originally made to allay fears of one company taking too large a share of the media market.
It also prompted speculation in Westminster that Mr Murdoch was about to off-load his UK newspaper holdings after more than 30 years of dominating the market to save his BSkyB bid.
Previously, Mr Hunt had said he was "minded" to accept the bid, but he had been under fierce pressure to refer it to the Competition Commission as the phone-hacking scandal deepened.
Politicians, led by Liberal Democrat Deputy Prime Minister Nick Clegg, were last night clamouring for Mr Murdoch to drop altogether his bid for the 61 per cent of BSkyB he currently does not control. But – in a statement that defied City expectations that it would drop its takeover plans – News Corps said it was ready to "engage with" the commission over full ownership of the broadcaster.
In a hastily re-drafted statement to the Commons, Mr Hunt said: "I know that colleagues on all sides of the House and the public at home feel very concerned at the prospect of the organisation, which allegedly allowed these terrible things to happen, being allowed to take control of what would become Britain's biggest media company.
"I understand that in the last few minutes News Corporation have withdrawn their undertakings in lieu."
He added: "As a result of News Corporation's announcement this afternoon I am now going to refer this to the Competition Commission with immediate effect."
Mr Hunt told MPs that he hoped the law "shows no mercy" to those involved in phone hacking – including "any managers who condoned such appalling behaviour".
Labour leader Ed Miliband took the unusual step of responding to the statement personally and accused Prime Minister David Cameron of leaving Mr Hunt to "carry the can" in an "insult to the House and to the British public".
However, the decision by News Corps also appeared to have saved Mr Hunt and the government from probable defeat in the Commons tomorrow.
Labour had planned to force a vote on whether the BSkyB deal should be referred to the Competition Commission in the Commons. But there was consternation that rules brought in by Labour in 2002 meant that a "fit and proper person" test could not also be applied as part of the review of competition issues.
However, Ofcom, the broadcasting regulator, has said it intends to consider applying a fit and proper test to executives in the Murdoch empire that could ultimately see it lose its 39 per cent holding in BSkyB, Scotland Yard reportedly discovered references to both Mr Brown and his wife Sarah in paperwork seized from Glenn Mulcaire, the convicted private investigator who carried out phone hacking for the News of the World. Even more damaging, the Sun was reported to have obtained medical records of the couple's son Fraser soon after it was discovered he had cystic fibrosis and then broke the story of the child's condition.
It was also revealed that Abbey National bank found suggestions that a "blagger" acting for the Sunday Times on six occasions posed as Mr Brown to access details from his account.
And it emerged Mr Brown's London lawyers, Allen & Overy, were tricked into handing over details from his file by a conman also working for the paper.
The details provoked fury in the Commons, as MPs pressed for the BSkyB deal to be put on hold and demanded action be taken against the newspaper group.
A spokeswoman for Mr Brown said last night: "Gordon Brown has now been informed of the scale of intrusion into his family's life. The family has been shocked by the level of criminality and the unethical means by which personal details have been obtained. The matter is in police hands.
"The police have confirmed Mr Brown is on Glenn Mulcaire's list. And some time ago Mr Brown passed all relevant evidence he had to the police".
Prior to the story being run in the Sun, Rebekah Brooks, who was then editor, contacted Mr Brown personally to ask him about Fraser's condition.
The Browns were said to be surprised that Mrs Brooks knew of their son's condition but sources said they now believe they know how she learned of the story.
Mrs Brooks has been at the epicentre of the phone-hacking scandal and allegations that police were paid for information by the News of the World because she was editor of the Sunday tabloid at the time.
She has said she knew nothing of the allegations but has been under pressure to resign as chief executive of News International.
News International said in a statement: "We note the allegations made today concerning the reporting of matters relating to Gordon Brown. So that we can investigate these matters further, we ask that all information concerning these allegations is provided to us."
However, last night Sky News quoted News International sources as being "comfortable" that stories reported by the Sun about Mr Brown's children were obtained via legitimate means.
Yesterday, in the Commons MPs from all sides of the House made clear they wanted Mr Murdoch to drop his bid for BSkyB.
Liberal Democrat deputy leader Simon Hughes said the Tories should join its coalition partners and "request" Mr Murdoch withdraw the bid.
Mr Hunt replied: "With respect to illegality, and with respect to all
people holding broadcasting licences to be fit and proper under the Broadcasting Act, had News Corp not withdrawn their undertakings today, I had written to Ofcom this morning to ask Ofcom whether, in view of things that came to light last week, they stood by their original advice that this deal could go ahead.
"I am pleased to say that with this referral to the Competition Commission all these issues will be considered fully."
Tory Epping Forest MP Eleanor Laing said most people "believe that if Mr Murdoch had any decency at all he would withdraw his bid".
In response Mr Hunt said the issues of the last week would be "considered in their entirety".
Labour's Sheffield Central Paul Blomfield said it was time Ms Brooks resigned as News International's chief executive.
He added: "It is wrong for ordinary staff at the News of the World to have been sacrificed in an effort by News International to protect those at the very top of the organisation who were really responsible for the scandal at that newspaper."
Mr Murdoch spent another day in London dealing with the crisis after flying into Britain on Sunday, the day of the last edition of the News of the World.
Ms Brooks, who was editor of the newspaper when murdered schoolgirl Milly Dowler's voicemail messages were allegedly intercepted illegally, has volunteered to speak to police about the wider phone-hacking scandal.
After meeting Mr Clegg, the Dowler family said yesterday that Ms Brooks should do the "honourable thing" and quit.
Meanwhile, Metropolitan Police assistant commissioner John Yates denied ever being asked to review his force's original phone-hacking investigation in 2006, which resulted in the newspaper's former royal correspondent Clive Goodman and Mulcaire being jailed.
In a letter to the Commons Home Affairs Select Committee, Mr Yates wrote: "From the beginning of my involvement in this matter in 2009, I have never conducted a 'review' of the original investigation and nor have I ever been asked to do so."