Media baron Rupert Murdoch's News Corp. will pay $3.2 million in a settlement with the family of murdered British schoolgirl Milly Dowler, whose voicemail was hacked by the News of the World tabloid.

Subsidiary News International and Milly's family confirmed the settlement in a joint statement Friday, the same day irate News Corp. shareholders confronted Murdoch and other company officials at its annual general meeting in Los Angeles.

The global media empire that owns Britain's Sun and Times newspapers, the Wall Street Journal, and the Fox movie studios and TV network shut down the 168-year-old London-based News of the World in July after evidence emerged that its reporters had eavesdropped on the voicemail messages of the 13-year-old after she disappeared in 2002. She was subsequently found murdered.


Milly Dowler, 13, was first reported missing in 2002. A nightclub doorman was convicted of murdering her. (Surrey Police/Associated Press)

The Dowler family will also designate charities to receive a further $1.6 million in personal donations from Murdoch, the statement said.  

"Nothing that has been agreed will ever bring back Milly or undo the traumas of her disappearance and the horrendous murder trial earlier this year," the Dowlers said in the statement.

"The only way that a fitting tribute could be agreed was to ensure that a very substantial donation to charity was made in Milly's memory. We hope that projects will be undertaken so that some good can come from this."

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The revelation that reporters eavesdropped on Milly's voicemail messages while police were searching for her — and mounting evidence that phone hacking was routine at the newspaper — shook Murdoch's media empire, and sent tremors through Britain's political, police and media establishments. Sometimes working with a private investigator, reporters also hacked the phones of celebrities, politicians and members of the royal family.

The scandal has forced the resignation of two of London's top police officers, ousted News Corp. executives and seen nearly 20 company personnel arrested.

Murdoch opened Friday's News Corp. annual general meeting meeting with a statement acknowledging the turmoil but also expressing some defensiveness, saying "some News of the World reporters broke the law" through their work with a lone British private eye, while on the whole, the tabloid held politicians to account and "broke great stories."

Other scandals brewing

News Corp. has expressed contrition over the phone-hacking scandal, launched an internal inquiry and set aside $32 million to compensate victims, who could number in their hundreds. Detectives have informed more than 450 people that they might have been spied on by the newspaper.

It's not the only fiasco facing the Murdoch media empire. 

A company executive resigned last week over a circulation scam involving the Wall Street Journal's European edition, which was paying a Dutch company to buy up copies of the newspaper at a massively discounted price in order to boost circulation figures.

And New York-based shareholder Amalgamated Bank is suing News Corp. over its $682-million acquisition of Murdoch's daughter's TV production house, a deal that gives Elisabeth Murdoch $323 million by greatly overvaluing her company, the bank alleges.

With files from CBC News