Sky sources have confirmed News Corporation chairman Rupert Murdoch is set to fly to London as a third person is arrested by police over alleged phone hacking at the News Of The World.
Mr Murdoch, 80, is due to arrive in London tomorrow in order to confront the crisis at the NOTW and News International.
Sky reporter Hannah Thomas-Peter in New York said: "Mr Murdoch was in Idaho and he was doorstepped by several reporters. He did not look happy and did not give any comments.
"He presided over the decision to axe a favourite newspaper in order to stop the rot - a phrase used here a lot.
"The idea was to send a message to investors and shareholders that News Corporation is serious about protecting the Murdoch brand and the proposed takeover of BSkyB.
"It is clear at the moment that it does not look like he has been able to stop the rot, so he himself is getting on a plane to fly to London to deal with it."
It comes as Scotland Yard said a 63-year-old man was arrested in connection with allegations of corruption at an address in Surrey by officers investigating phone hacking.
Sky sources say the man is believed to be a private investigator who worked for the NOTW.
Sky's crime correspondent Martin Brunt said: "There are two investigations going on side-by-side - one into allegations of phone hacking and the second into allegations that the NOTW made illegal payments to police.
"This man is being held on suspicion on both of those issues and he is the eighth suspect arrested since the launch of these operations in January."
Meanwhile, News International has denied claims that police are investigating suspected deletion of emails by an executive at the company.
The Guardian reported that Scotland Yard is probing claims that a member of staff deleted "millions of emails" from an internal archive.
A News International spokeswoman said: "This assertion is rubbish. We adopted a documented email retention policy in line with our US parent's records management policy. We are co-operating actively with police and have not destroyed evidence."
Scotland Yard refused to comment on the allegations.
Earlier this evening, former NOTW editor Andy Coulson and ex-royal Editor Clive Goodman were released on police bail after being arrested over allegations of phone hacking and payments to officers.
David Cameron's former spin doctor left Lewisham police station in south-east London saying: "There is an awful lot I would like to say, but I can't at this time."
The 43-year-old was released on police bail until October.
Mr Goodman who was re-arrested by police in connection with alleged police payments has also been released on bail until October.
The 53-year-old, who was jailed in January 2007 for phone hacking, was held after a dawn swoop by officers at his home in Surrey.
Officers conducted a search of his property and his desk at work, as well as Mr Coulson's residence.
The Daily Star Sunday said detectives spent two hours at its offices in central London and took away a disc containing a record of all Mr Goodman's computer activity.
The paper stressed there is "no suggestion whatsoever" that the journalist acted improperly during his occasional freelance shifts at the tabloid.
Mr Goodman, who currently works for the Daily Star Sunday, was arrested in August 2006 along with private investigator Glenn Mulcaire over allegations they hacked into the mobile phones of members of the royal household.
Five months later the royal reporter was jailed for four months and Mulcaire for six months after they admitted intercepting voicemails, including some left by Prince William.
Brunt said police had put in place a plan with Mr Coulson and his solicitor to go to the police station by appointment.
A statement from the Metropolitan Police confirmed that a 43-year-old and a 53-year-old who were detained by officers from Operation Weeting and Operation Elveden had been bailed.
The first operation concerns phone hacking; the second, alleged bribes paid to officers by journalists.
Mr Coulson resigned in January this year as Downing Street communications chief, saying the drip-drip of claims about illegal eavesdropping under his editorship was making his job impossible.
The reports concerning Mr Cameron's former aide follow last night's shocking news that this Sunday's edition of the best-selling tabloid is to be its last.
The axe fell on the newspaper after a series of increasingly damaging allegations left its reputation in tatters.
James Murdoch, chairman of publisher News International, said the 168-year history of Britain's best-selling newspaper would end after Sunday's publication.
The bombshell announcement came as advertisers deserted the News of the World in droves and police revealed 4,000 people may have had their phones hacked.
Mr Murdoch, the son of Rupert Murdoch, pulled the plug on the paper after claims that it paid private investigators to illegally intercept voicemail messages.
Messages targeted included those of murdered schoolgirl Milly Dowler , bereaved military families and relatives of 7/7 bombing victims.
The NOTW also stands accused of paying thousands of pounds illegally to corrupt police officers.
News of the World journalists reacted with shock and sadness.
There were tears in the newsroom when News International chief executive Rebekah Brooks, the editor when hacking occurred, broke the news to staff.
Ms Brooks has kept her job.
Current editor Colin Myler said last night: "This is the saddest day of my professional career.
"For 168 years the News of the World has been a huge part of many peoples' lives.
"Sundays without this great British institution will not be the same."
The shock closure came hours after the Royal British Legion dropped the News of the World as its campaigning partner.
It expressed "revulsion" at allegations that war widows' phones may have been hacked.
As the day went on more and more of Britain's biggest companies - among them Sainsbury's, O2 and npower - said they were pulling their advertising.
James Murdoch announced NOTW was closing just after 4.30pm yesterday in a 950-word statement to staff.
Mr Murdoch admitted that the paper's internal inquiry into earlier phone hacking claims was inadequate.
When the royal editor and Mr Mulcaire were jailed in 2007, the publisher originally claimed this was the full extent of the scandal, blaming a single rogue reporter.
Mr Murdoch accepted that the paper made statements to Parliament "without being in the full possession of the facts".
This weekend's edition of the News Of The World will have no commercial advertisements and all the revenue from sales will go to good causes.