Rupert Murdoch's News Corporation has withdrawn its bid for satellite broadcaster BSkyB in the wake of the phone-hacking scandal.
News Corp, which also owns the Sun and the Times newspapers as well as its 39% shareholding in BSkyB, said it will continue to be a long-term shareholder in the company.
Chase Carey, deputy chairman, president and chief operating officer of News Corp, said: "We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies but it has become clear that it is too difficult to progress in this climate."
Shadow culture secretary Ivan Lewis said the "remarkable" development was "a victory for the public of this country, a victory for Parliament and a victory for the tremendous leadership that Ed Miliband has shown ever since this scandal emerged".
Mr Lewis said it was important that the criminal investigation and judge-led inquiry continue regardless of the bid being withdrawn.
He told the BBC: "What we mustn't allow this announcement to do is to end the need to get to the bottom of this unethical and criminal behaviour that has so damaged our newspaper industry and has also threatened to undermine our democracy."
Former deputy prime minister Lord Prescott, who believes his phone was hacked by the News of the World, sent a message on Twitter saying: "BSkyB bid over. PCC to be abolished. Senior News International staff arrested. Inquiry into police and press on its way. Yep. I'm happy."
BSkyB shares fell another 1% to 683.5p, having been 850p earlier this month on hopes of a deal with News Corp. They have slumped in recent days amid the hacking scandal and after Culture Secretary Jeremy Hunt referred the proposed bid to the Competition Commission for further investigation.
Pressure on Mr Murdoch intensified on Tuesday when Prime Minister David Cameron joined all-party demands for the media mogul to drop the bid.
Read More
News Corp tabled its 700p-a-share approach for the 61% of BSkyB that it does not currently own in June last year, a move which valued the FTSE 100 Index company at around £12 billion.
