Profile: James Murdoch, deputy chief operating officer of News Corp

Last week the 38-year-old - who emerged as his father's heir apparent in July 2005 when his older brother Lachlan unexpectedly resigned from the family business - lived up to that exalted billing when it was announced that he has been appointed to Lachlan's old job as deputy chief operating officer and will head up News Corporation's international operations as chairman and chief executive.

The significance of this is difficult to overstate. James has been the most powerful man in the British media since his appointment as BSkyB chairman and chief executive of News Corp in Europe and Asia in 2007, but last week's announcement effectively makes him father Rupert's representative on Earth. Now based in New York, he will work cheek by jowl with his 80-year-old father.

With a strategy that has included the recent $12 billion (7.5bn) buy-out of the 61 per cent of BSkyB shares he didn't already own, Rupert Murdoch has spent the past two decades trying to ensure one of his six children takes over his mantle at News Corp. If the organisation survives intact post-Murdoch Snr - which insiders such as Andrew Neil believe is unlikely - then James seems set to form the next generation of the dynasty. If so, he will become the most powerful media mogul in the world.

For those who knew James Murdoch in his formative years, this turn of events has come as a surprise. Of the six Murdoch children, James is considered the brightest, with one former colleague saying "he's incredibly bright, in the top 0.01 per cent", but it was his older sister and brother, Elisabeth and Lachlan, who were the ambitious ones. They have been chewed up and spat out by their father's machine, though. Elisabeth recently returned to the fold when News Corp bought her production company, Shine, but Lachlan continues to rebuff his father's overtures.

There were always huge doubts about whether James was even interested in working with his father. Rich enough to do nothing, the young James alternated between being a bookish teenager one minute, a white-knuckle rebel the next. At the prestigious Horace Mann High School in the Bronx, he dyed his hair blond, pierced his ears and an eyebrow, got a tattoo and argued with teachers. At Harvard, he penned scurrilous cartoons for the Harvard Lampoon and before dropping out to launch an underground rap label and then hang out in Rome and dream about becoming an archaeologist.

James's earliest experiences of the media didn't thrill him either. Working as a 15-year-old intern at the Sydney Mirror, he fell asleep on a sofa at a press conference - the picture appeared on the front of the rival Sydney Morning Herald next day. Unlike his father, who has ink in his veins and loves newspapers and journalists, James's experience of the press in his youth was of rival papers and magazines picking his family apart. "James shows no sign at all of liking journalists," says Emily Bell, director of the Tow Centre for Digital Journalism at Columbia University. "In fact, it's quite the opposite."

But if James doesn't have his father's love of newspapers, or relish of the gossip in which tabloid journalists trade, both share the Midas touch when it comes to the media business. When 27-year-old James was appointed in 2000 to head up Star, News Corp's ailing Asian TV operation, it was losing $100 million a year and facing Chinese resistance to foreign media - this year, thanks to James's decision to target India, Star will make a $250m profit on a $1bn turnover.

He was even more successful with Sky, which he headed up from 2007 despite institutional investors squealing about nepotism. In his first investor presentation, he laid out his plan to increase subscriber numbers from 7.4 million to 10 million - and saw Sky's share price tumble 20 per cent. Yet those plans, including heavy investment in broadband and high-definition technology, have transformed the sluggish Sky brand and seen profits rocket.

One of James's skills is a grasp of new technologies, which his father doesn't share. In particular, he has a visionary's appreciation of the internet and has been responsible for News Corp's approach to the medium, one which has underpinned the corporation's increasing profitability.

He shares his father's energy and work ethic. A competition-standard cyclist and a black belt in karate, he rises early to go to the gym and works standing up because it's more efficient than sitting. "There is an intensity to him," says Frank Luntz, the Republican pollster who once worked for him. "The guy's got intensity wrapped around energy."

James also shares his father's sense of being an outsider and engenders great loyalty from his staff, but he is temperamentally different. The New York Times, which is in competition with the Murdoch-owned Wall Street Journal, summed up the difference between the cavalier Rupert and roundhead James thus: "James is more blunt, more bureaucratic and less able to smooth ruffled feathers (than his father]." There is also a temper, which he displayed when he and Rebekah Brooks turned up at The Independent to berate its editor for running an ad campaign critical of the Murdoch empire.

That was an unusual lapse for a restrained man who is said by friends to be self-consciously polite and courteous, and whose strait-laced principles have been offended by the tenor of Fox News coverage and the tabloid phone-tapping scandal. James spends most of his spare time with his American model wife Kathryn, who works for the Clinton Climate Initiative and shares a deep concern for the environment with her husband, and their two children.

Murdoch shuns the limelight to the point where he told his PR adviser at BSkyB that he would be doing his job properly when the papers started referring to him as "the reclusive James Murdoch". Whether Murdoch Jnr's self-imposed veil of relative anonymity will be able to withstand his rise to prominence is quiet another thing, but don't bet against it.

Facts of life

• James's favourite place is New England, which he has described as "God's country. I'd like to retire in New England. When I'm like 80 or something, live by the sea."

• A snappy dresser, he loves expensive Prada and Armani suits, or seersucker suits and a Panama hat.

• He has two tattoos, one of which is a lightbulb on his arm.

• James's middle name is Rupert.

• Murdoch started Rawkus, the underground hip-hop label of the late 90s that helped launch Eminem (inset), Mos Def, and Talib Kweli.

• He took a year out of Harvard to follow the Grateful Dead around the US.

• His great love is cars, and his collection includes an 87,000 Tesla electric sports car.

• Murdoch is a talented cartoonist who used to contribute to US magazine Gear.