Wall St Journal sales figures falsified, claims the Guardian

A row erupted today between the Murdoch media empire and the Guardian - the newspaper that exposed phone hacking at the News of the World.

The Wall Street Journal accused the Guardian of "peddling untruths" and making "malign interpretations".

It came after allegations that a senior executive at the WSJ presided over a "circulation scam". The report claimed that European publisher Andrew Langhoff had resigned after running a secret project to sell thousands of copies of the paper at a discounted rate.

But today Dow Jones, parent company of the Wall Street Journal Europe, claimed the scheme was approved by regulators. "Andrew Langhoff resigned because of a perceived breach of editorial integrity, not because of circulation programs," it said.

The Guardian claimed that a whistleblower last year alerted executives in New York, including Rupert Murdoch's right-hand man Les Hinton, to the "highly controversial activities". But the whistleblower was then made redundant. It said Dutch consulting firm ELP paid for publicity in the Wall Street Journal Europe by buying copies of the newspaper for five cents each.

It alleged the papers were then distributed free to students who "may or may not have read them". The scheme accounted for 41 per cent of the Wall Street Journal Europe's 75,000 daily sale.