James Murdoch has been accused of misleading MPs by two former News of the World executives.
Colin Myler, who edited the paper until its closure two weeks ago, and Tom Crone, formerly the paper's top lawyer, issued a statement last night saying that Murdoch had been "mistaken" in his evidence.
The disagreement hinges on an email known as the "for Neville" email because its link to the paper's former chief reporter, Neville Thurlbeck, would have blown a hole in News International's defence that phone-hacking was just the work of one rogue reporter, Clive Goodman. The email is thought to be a key factor in News International's decision to pay a settlement of around £700,000 to Gordon Taylor, chief executive of the Professional Footballers Association, when he threatened to sue the paper.
At the select committee on Tuesday, Labour MP Tom Watson asked him about this.
Watson: "When you signed off the Taylor payment, did you see or were you made aware of the full Neville email, the transcript of the hacked voicemail messages?"
Murdoch: "No, I was not aware of that at the time."
He claimed that Myler and Crone hid the email from him. However, their statement contradicts this claim:
Just by way of clarification relating to Tuesday's Culture, Media Select Committee hearing, we would like to point out that James Murdoch's recollection of what he was told when agreeing to settle the Gordon Taylor litigation was mistaken.
In fact, we did inform him of the 'for Neville' email which had been produced to us by Gordon Taylor's lawyers.
So what happens now? John Whittingdale, the chairman of the select committee said that this email was "one of the most critical pieces of evidence in the whole inquiry", and said that MPs would be asking Murdoch to respond and clarify.
However, it is unlikely that this will get very far. Thus far, News Corporation has issued the following statement in response:
James Murdoch stands by his testimony to the select committee.
It is difficult to see circumstances in which this would be revoked, in the absence of concrete evidence that Murdoch saw the email. Wilfully misleading a select committee is not technically a crime as evidence is not given under oath, but it certainly would not look good.
Crone and Myler's intervention is deeply troubling. If their claim is true (and given the large payment to Taylor and his confidentiality agreement, it it certainly not outside the realm of possibility), then at best Murdoch has forgotten evidence of serious criminality at his company, and at worst he has deliberately misled MPs. It is not the first time that News International executives stand accused of doing so.
Parliament is now in recess, making it unlikely that the select committee will hold a special evidence session to clarify the issue, although such a course of action is not unprecedented. One thing we can be certain of is that this story is not disappearing.