© Richard Clement/ReutersRupert Murdoch has extended his stay in London to deal with the phone-hacking crisis.
He doesn't need to prove that Brooks knew about phone hacking to conclude that she's not the person to sort out the mess

The News of the World phone-hacking scandal is spinning out of control. The damage it will cause seems likely to spread far wider than News International, the newspaper's parent company controlled by Rupert Murdoch, though obviously it lies at the centre of the storm.

David Cameron's political reputation is at risk for having hired as his spin doctor Andy Coulson, the editor of the News of the World when phone hacking took place. If Mr Coulson should be implicated - seemingly an increasingly likely outcome now that its former news editor Ian Edmondson is helping police with their inquiries - the Prime Minister's judgement and good sense will be seriously questioned.

Others also face devastating criticism. The Metropolitan Police stands accused of conniving in a cover-up. The apparent feebleness of the Press Complaints Commission will probably lead to calls for the statutory regulation of newspapers. Inquiries into telephone hacking may spread to other titles. In fact, it is not too much to say that some sort of sea change may be taking place, with some politicians, resentful that they have been in the dock over expenses, turning not just on the delinquent News of the World but on newspapers in general.

How on earth did this happen? How did a phone-hacking scandal on a Sunday "red top" become so big a story that it threatens to engulf people who must have imagined they were mere bystanders? The main answer to that question is that News International has handled this affair abominably. Whether its senior executives have merely been devious and short-sighted, or whether they have actually colluded in criminality, remains to be seen.

Mr Edmondson was no bit-part player at the NOTW. He was its news editor, important enough to pick up an award on its behalf. He was also close to Mr Coulson, who brought him on to the paper. For more than four years, Mr Edmondson failed to disclose what he knew about phone hacking, and has done so only after lawyers acting for the actress Sienna Miller alleged his complicity last month, precipitating his suspension. At the time of Mr Coulson's resignation as editor in January 2007, if not before, Mr Edmondson should have been dismissed, along with any executive who knew about the phone hacking.

The NOTW's failure to do so inevitably raises further questions. News International's chief executive officer since 2009 has been Rebekah Brooks. As Rebekah Wade she was editor of the NOTW from 2000 until 2003 (when she was succeeded by her friend Andy Coulson) and then editor of The Sun from 2003 until her elevation to the upper reaches of management. I find it rather difficult to believe that illegal practices widespread while Mr Coulson was editor - in 2006, police seized material including 30 audio tapes which appear to contain recordings of voicemails and 91 PIN codes - were completely unknown to Mrs Brooks.

At any rate, her possible knowledge or involvement is a working hypothesis for anyone looking into this affair. And yet for the past 18 months, during which an apparent non-story has mushroomed into a scandal, Mrs Brooks has been News International's most senior executive, answerable only to James Murdoch, its chairman, and his father, Rupert. She refused to appear in front of the Commons Culture, Media and Sport Committee investigating phone hacking in July 2009. According to one of its members, Adam Price, the committee abandoned attempts to call her after some of its members became worried that their private lives might be investigated by red-top newspapers.

Mrs Brooks is a favourite of Rupert Murdoch, who flew from New York to London this week to deal with the phone-hacking scandal and revive his company's bid to take full control of BSkyB. It is not necessary to prove that she had personal knowledge of phone hacking for him to conclude that she is not the right person either to sort out this mess or to restore the battered reputation of News International. Appointing a former red-top editor with no commercial experience to be chief executive officer of the largest newspaper group in Britain was not the smartest move Mr Murdoch ever made.

Unless he can grasp this decisively, things will only get worse. Is he, at nearly 80, sufficiently on top of things? It is hard to know. What is certain is that Rebekah Brooks and James Murdoch have allowed a problem to grow into a crisis by failing to act earlier. The damage cannot be undone, but it could get much worse.

Of course, the matter is no longer only in Rupert Murdoch's hands. Now that the police are involved again, they will be anxious to counter allegations that their previous investigation in 2006 was half-hearted and overly sympathetic to the News of the World. Andy Hayman, who as the Met's former assistant commissioner led that inquiry, subsequently joined News International's The Times as a columnist. That does not seem right to me.

I hope Mr Murdoch will bring a fresh broom, and I am almost certain that a more robust police investigation will lead to further prosecutions. If these should include Mr Coulson, and a conviction were secured, David Cameron would be in a pickle. Several people warned him at the time not to appoint Mr Coulson only six months after his resignation from the News of the World. To anyone who knew about newspapers, and especially Sunday ones, which employ many fewer journalists than dailies and deliberate more collegiately over their stories, it seemed almost inconceivable that Mr Coulson was not fully in the picture.

Whatever happens, Mr Cameron would be wise to put himself at a greater distance from Rupert Murdoch and his lieutenants. What has the media mogul delivered to him? Only the fervent support of The Sun, which did not win him the election. Otherwise the association has brought him grief. And yet, after all that has happened, he found time to have dinner over Christmas at Rebekah Brooks' house in Oxfordshire in the company of James Murdoch. With a decision on the bid for BSkyB pending, this was an almost insane thing to do.

This scandal might never have resurfaced had it not been for The Guardian's Nick Davies, who in July 2009 revealed that News International had paid £700,000 to Gordon Taylor, chief executive of the Professional Footballer's Association, because the News of the World had hacked into his phone. Mr Davies stuck to his guns and bravely took on News International. I do not share his views about the complete dysfunctionality of the tabloid Press, but it is impossible not to admire him. I once teased him for being "the sort of journalist who can find a scandal in a jar of tadpoles". This has turned out to be some jar.

Where will this end? Not, I hope, in the demonisation of the entire Press and statutory regulation. If that is to be avoided, the News of the World, and other tabloids, must show that they do not believe they can act outside the law. It is incredible that, according to the BBC, a journalist on the Sunday red top allegedly hacked into the phone of interior designer Kelly Hoppen as recently as a year ago.

This nonsense must stop. Rupert Murdoch should put someone fit in charge of News International. The police must bring the culprits to court. And then, perhaps, we can begin to put back the pieces together again.

Will Senior Executives Be Prosecuted?

The contention surrounding the News of the World phone hacking case is that senior executives must have known that the practice was in wide circulation.

But, while perhaps morally wrong, simply being aware that reporters were engaging in such nefarious acts and doing nothing about it is not necessarily a crime in itself.

In Britain, even if you are aware of a criminal act taking place, you are under no obligation to tell the police. And to be implicated in a conspiracy you must do at least one overt act which shows you are helping that crime take place.

In the case of phone hacking that would be signing payments or directly instructing someone to hack into a telephone. Simply knowing it was happening and doing nothing to stop it is not necessarily a crime.

Mark Stephens, a media lawyer, said: "If I see my neighbour mugging someone I do not have to report it. The same principle applies here. Just because you know about phone hacking, does not make you guilty of anything.

"There is a slight difference though in that with a newspaper there is a command and control structure so if anyone at the top of that structure is doing anything that signifies their involvement then there could be issues for them. If you are actively party to something then you are involved, and that raises issues of whether or not you are part of a conspiracy."