News Corp. has withdrawn its bid for satellite broadcaster BSkyB, reports Sky News and BBC News. The bid was dropped in wake of the continuing damaging phone hacking allegations against U.K. tabloid News of the World and News International. Sky News adds that News Corp. "intends to remain a long-term shareholder in BSkyB." The Wall Street Journal has the full statement from News Corp:

News Corporation (“News Corp”) announces that it no longer intends to make an offer for the entire issued and to be issued share capital of British Sky Broadcasting Group PLC (“BSkyB”) not already owned by it.

Chase Carey, Deputy Chairman, President and Chief Operating Officer, News Corporation, commented: “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. News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it.”

In previous days, observers had expressed skepticism over News Corp.'s bid, particularly as the named victims of the phone hacking scandal included even more high-profile figures. We'll be updating with more information.