News Corporation announced yesterday that James Murdoch, once seen as the logical heir to his father Rupert's media empire, has stepped down as News International chairman.

Although James Murdoch will remain deputy COO of News Corp, the company announced in a press release that he has "relinquished his position" at its subsidiary News International, which publishes the Sun and the Times of London.

Instead, James Murdoch will move to New York, where, according his father, he will "continue to assume a variety of essential corporate leadership mandates, with particular focus on important pay-TV businesses and broader international operations."

James Murdoch steps down as News International continues to deal with the consequences of the phone-hacking scandal that led to the closure of the News of the World last summer. Murdoch himself was twice called before the UK parliament's media select committee to answer questions about his involvement in the scandal.