Britain's media regulator ruled Thursday to let pay-TV giant BSkyB keep its broadcasting licence, but blasted James Murdoch for failing to uncover the hacking scandal that has rocked his father's empire.
The broadcaster, in which Rupert Murdoch's US-based News Corporation has a 39-percent stake, expressed relief at the result of media regulator Ofcom's probe into whether Sky illegally hacked phones like the tycoon's News of the World tabloid.
"Ofcom considers that, on the evidence currently available and having taken into account all the relevant factors, Sky is fit and proper to hold its broadcast licences," the regulator said in a statement.
Ofcom said there was no evidence that BSkyB had used phone-hacking as a means of getting scoops and cleared the company of any involvement in the scandal at the now-defunct newspaper.
But it dished out harsh criticism of 39-year-old James Murdoch for failing to uncover the scandal while executive chairman of his father's British newspaper wing, News International.
"We consider James Murdoch's conduct, including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged," it said.
It said his conduct at the newspaper business "repeatedly fell short of the exercise of responsibility to be expected of him as CEO and chairman."
James Murdoch quit as BSkyB chairman in April and as executive chairman of News International in February. He remains a non-executive director of BSkyB and an executive director at News Corp.
BSkyB welcomed the Ofcom ruling.
"Ofcom is right to conclude that Sky is a fit and proper broadcaster," the company said in a statement.
"As a company, we are committed to high standards of governance and we take our regulatory obligations extremely seriously. As Ofcom acknowledges, our track record of compliance in broadcasting is good."
Ofcom said it was still considering two cases of email hacking by journalists at Sky News, in cases unrelated to the News of the World scandal.
The news channel admitted in April that it illegally hacked into the emails of canoeist John Darwin, who notoriously faked his own death in a life insurance scam, as well as the account of a suspected paedophile.
With 11 million customers and revenues of £6.8 billion ($11 billion, 8.5 billion euros) in the last financial year, BSkyB is Britain's biggest pay-TV broadcaster, with channels for sport, news and entertainment.
News Corp was forced to drop its bid for full control of BSkyB in July 2011 over the hacking scandal.
Earlier that month Rupert Murdoch had been forced to close the News of the World over a storm of revelations that its staff illegally hacked the voicemail messages of a murdered schoolgirl and a slew of public figures.
James Murdoch has faced intense pressure over how much he knew about the hacking.
He apologised for his conduct in a letter to British lawmakers in March, saying he should have "asked more questions, requested more documents and taken a more challenging and sceptical view of what I was told."
News Corp announced in June that it was splitting into two companies, protecting its entertainment interests from its struggling publishing business.
Australian-born Rupert Murdoch, 81, resigned in July as director of a number of companies behind The Sun, The Times and The Sunday Times.
Eight people -- including Andy Coulson, the ex-News of the World editor and former spokesman to Prime Minister David Cameron, and Rebekah Brooks, the former News International chief -- have been charged with phone-hacking.
A total of 24 people have been arrested by Scotland Yard on suspicion of phone-hacking, while 50 have been detained in its sister investigation into corrupt payments by journalists to public officials.
A 30-year-old journalist was arrested on Thursday in connection with a third related inquiry involving privacy breaches using stolen mobile phones, police said.