"The News of the World is in the business of holding others to account," the deputy chief operating officer of News Corporation told staff of the 168-year-old newspaper.
"It failed when it came to itself.
News Corporation has been rocked in the last week by claims that its best-selling Sunday tabloid hacked in to the phones of relatives of British soldiers killed in action, of missing children and those caught up in the July 2005 London bombings.
Steven Barnett, professor of communications at Westminster University, said he was "gob-smacked" by the announcement.
"Talk about a nuclear option," he told Reuters. "It will certainly take some of the heat off immediate allegations about journalistic behavior and phone hacking."
Now if it will do the same to Faux News!