Reporter held over police payments in new blow to Murdoch

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Detectives investigating illegal payments to police officers arrested a journalist from Rupert Murdoch's British newspaper stable on Friday, heaping further pressure on the mogul's media empire.

Media reports said the man was Jamie Pyatt, who has worked for the past two decades for The Sun tabloid, the sister paper of The News of the World weekly which was closed in July in a scandal over phone hacking.

The arrest came as the newspapers' parent company, News International, unveiled details of its compensation scheme for hacking victims, which it hopes will prevent any further costly lawsuits.

In a statement, police said a 48-year-old man had been arrested on allegations of corruption, the sixth person to be held in the investigation.

They did not name him but News International confirmed "that an employee has been arrested this morning", adding that it was "cooperating with the Metropolitan Police in its various investigations".

These include a separate probe into hacking under which numerous people have been arrested since January, including former News International chief executive and one-time News of the World editor Rebekah Brooks.

Another former editor, Andy Coulson, who was Prime Minister David Cameron's media chief until January, was also arrested.

News International announced the compensation scheme in April with a public apology after admitting that hacking went far beyond a rogue reporter and a private detective who were jailed for the practice in 2007.

It said the scheme was a "speedy, cost effective alternative" to lawsuits for victims, who police suggested on Thursday could number almost 5,800.

Despite the apologies, previous compensation deals and the resignation of senior Murdoch executives, the hacking row has refused to go away and has also caused problems in other parts of the Australia-born tycoon's media empire.

In Britain, the row sparked a major inquiry into press practices, while lawmakers have recalled Murdoch's son, News International chairman James Murdoch, to answer questions over hacking for a second time on Thursday.

Media reports suggest News International has set aside £20 million (23 million euros, $32 million) to compensate hacking victims, although a spokeswoman refused to confirm this, saying only that there was "no maximum".

Former High Court judge Charles Gray will act as the independent ajudicator for the scheme, which intends to process each claim within six months and is offering 10 percent more than what victims could expect to receive in court.

"I am confident the scheme, which is now operational, will provide a fair, effective and speedy means for determining compensation in these cases," Gray said in a statement.

"It should provide very significant benefits to applicants such as avoiding the enormous expense of court proceedings."

However, one lawyer warned that joining the scheme would likely require potential victims to waive their ability to launch a further legal battle.

"Effectively, there is no possibility of an appeal, save where there has been 'serious irregularity'," said Steven Heffer, head of defamation and reputation management at solicitors Collyer Bristow.

News International has already settled a string of claims, including by actress Sienna Miller, who agreed to take £100,000 in damages and legal costs in June after bringing a case at London's High Court.

Last month, the company also confirmed it would pay £2 million to the family of murdered teenager Milly Dowler. Revelations that the 13-year-old's voicemail was hacked after she went missing in 2002 sparked the scandal in July.

© 2011 AFP

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