US reviewing calls for News Corp probe

"There have been serious allegations raised in that regard in Great Britain and there is an ongoing investigation there," Holder told reporters in Sydney, where he is attending a meeting of justice officials.

"There have been members of Congress in the United States who have asked us to investigate the same allegations, and we are progressing in that regard using the appropriate federal law enforcement agencies in the United States."

His remarks follow the launch of an FBI probe Thursday into allegations that British tabloid the News of the World -- closed amid the hacking furore -- contacted a US private eye in a bid to access phone records of 9/11 victims.

The FBI inquiries are preliminary in nature and do not constitute a formal investigation, but the development means the scandal engulfing Rupert Murdoch\'s under-fire media empire has now firmly crossed the Atlantic.

Holder confirmed there was an FBI investigation under way but would not comment on the details.

His British counterpart Dominic Grieve said the matter was being taken "very seriously" and "the Crown Prosecution Service are actively involved in providing advice as the investigation proceeds".

But both Grieve and Australian attorney-general Robert McClelland ruled out regulating their national media, despite the spreading scandal.

"It\'s perfectly possible there could be a review of the way that the press is regulated," Grieve said.

"That said, I rather concur with the view that a free press is extremely important.

"We don\'t wish to end up, whatever may have happened ... with a press which is incompatible with freedom of expression," he added.

Murdoch\'s global News Corp empire was born in Australia and he is still a dominant media player in his homeland, where there are similar calls for a government inquiry into media ownership and regulation in the scandal\'s wake.

Prime Minister Julia Gillard has indicated she would be open to such a probe, but her top legal officer McClelland stressed there would be no moves to regulate Australia\'s media.

"It\'s a very important aspect of democracy to have an independent and robust media, and there will be no question of the government regulating the media," McClelland said.

It would be "inevitable" that privacy questions were revisited following the News of the World scandal, which has also seen Murdoch abandon his lucrative bid for British pay TV giant BSkyB, added McClelland.

"I\'m confident in respect of the issue of interception or use of interception powers that our laws are strong," he said.

"However, it may well be that there is an appropriate dialogue between the community and the various press councils and electronic media organisations."

Murdoch, 80, and his son James will appear before British lawmakers, after yielding to intense pressure to testify before an inquiry.

The media baron sought to calm the fears of News Corp shareholders, telling the Wall Street Journal the crisis was being handled "extremely well" and the brand\'s damage in Britain was "nothing that will not be recovered".

The company\'s Australian-listed stock dropped 2.83 percent to Aus$14.77 Friday, all but obliterating brief gains made Thursday in what was an otherwise grim week of losses.

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