The British Parliament is set to hold an emergency debate over the widening phone hacking scandal involving a private detective working for the News of the World newspaper.
Politicians and the public have expressed shock and anger over revelations the tabloid hacked into the phone of a missing schoolgirl who was later found murdered.
Pressure is now increasing for a full public inquiry and advertisers are being asked to consider pulling out of their contracts with the paper.
Police have informed the three families of murdered girls Milly Dowler, Holly Wells and Jessica Chapman their phones may have been hacked into in the days following the girls' respective disappearances in 2002.
It is alleged the culprit was Glenn Mulcaire, a private detective working for the paper.
It is alleged Mulcaire deleted the voicemail messages of murdered girl Milly Dowler when the inbox became full, giving her family false hope she was still alive.
He has already served time for plotting to hack into the phone messages of royal aides.
Celebrities have also been targeted with his tactics.
UK prime minister David Cameron has condemned the alleged acts.
"If they are true, this is a truly dreadful act and a truly dreadful situation," he said.
But Mr Cameron is being put in a difficult position because of his links to two former News of the World editors. One former editor, Andy Coulson, resigned from his position as Mr Cameron's communications director earlier this year.
Mr Coulson said his position had become untenable because of the phone hacking scandal.
Mr Cameron is under pressure to add his voice to calls for another former editor and now key figure in Rupert Murdoch's newspaper empire to step down.
Rebekah Brooks, who is a close friend to Mr Cameron, was editor of the paper when the hacking was alleged to have occurred.
Opposition leader Ed Miliband says Ms Brooks should consider her position.
"This wasn't a rogue reporter, it wasn't just one individual. This was a systematic series of things that happened," he said.
"What I want from executives at News International is for people to start taking responsibility for this."
But News International's Simon Greenberg says Ms Brooks will not bow to any pressure to stand down as head of the UK arm of the business.
"I think she has been very clear today that that is absolutely what she won't do," he said.
"This happened back in 2002. She is now chief executive of a company in 2011. She is absolutely determined to get to the bottom of this issue."
Questions are being asked about how much police knew about the hacking tactics being used and calls are growing for a full public inquiry into the scandal.
They are only likely to get louder following reports that the phones of families of victims of the London bombings may also have been hacked into.
British MP Tom Watson has frequently spoken out about the phone hacking saga and says there are a lot of high-profile cases.
"Whistleblowers involved in this case tell me there are a lot of high-profile crime cases where people were the targets of News International's phone hackers. So it is very, very serious and the story is still unfolding," he said.
Mr Watson says he thinks it is a distinct possibility allegations are true that London bombing victims' phones were hacked into.
"The real tragedy of this scandal is that it was the phones of victims in high-profile crime cases that were hacked and they have to relive their tragedy over and over again, particularly when they find out that their privacy was invaded," he said.
"It is incomprehensible that a journalist could think this is the right thing to do and just unbelievable that News Corp, a $50 billion enterprise, could allow this to happen for so long."
Car maker Ford has suspended its News of the World advertising in the face of the new allegations.
A social media campaign is also gaining momentum to try to persuade other companies to follow suit.
One commentator suggested a mass burning of the newspaper this Sunday, but then reflected it might be a little too tabloid.
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