James Murdoch was accused of being a “mafia boss” as he gave further evidence today to the Commons culture, media and sport select committee about the phone hacking scandal.

During the two-and-a-half hours of questioning, Murdoch trod a fine line between appearing blissfully unaware of the extent of phone-hacking at the News of the World, and attempting to convince the committee that he supervised his company appropriately.

He also explicitly blamed the paper’s legal adviser Tom Crone and former editor Colin Myler for misleading the select committee, noting that their previous testimony was “economical”, “inconsistent” and full of “supposition”.

Murdoch repeated his previous claim that he had not received “evidence of widespread criminality” at the News of the World in meetings in May and June 2008 with Crone and Myler.

However, this contradicts evidence given by the pair, who told the committee in September that they had discussed with Murdoch the infamous “for Neville” email during said meetings. The email contained transcripts of hacked voicemails on the phone of Gordon Taylor, who was then suing the paper for breach of privacy. It is seen as a key indicator that hacking extended beyond Clive Goodman, the paper’s Royal correspondent who had been jailed in 2007 for hacking the phones of members of the Royal family.

He also maintained the pair had never discussed with him the significance of Michael Silverleaf QC’s legal opinion from 3 June 2008, which warned of “a culture of illegal information access” at News International that involved “at least three” of its reporters.

The News Corp boss was scrutinised in light of Silverleaf’s opinion, which also advised the newspaper to settle its case against Taylor. Murdoch insisted that he had no knowledge of the memo prior to his authorising a £750,000 payout made to Taylor in August of the same year. Again, he blamed Crone and Myler, arguing they “should have told me the whole story”.

Yet why Murdoch did not scrutinise the details of the Taylor payout, as well as his apparent ignorance of the scale of criminal activity at News International, raised issues of his competence as an executive. The committee asked, “which is worse? Willful blindness or incompetence by not knowing what was going on?”

Murdoch responded that News International was a “small piece of the News Corporation cake” and that it was “impossible” to manage every detail.

“I can’t believe your organisation has been so successful by being so cavalier with money,” Philip Davies MP added later.

Paul Farrelly said,

The one thing that shows us and any 10-year-old that the News of the World did not stack up is that Gordon Taylor was not a royal or a member of the royal household.”

Did [Murdoch] not ask “how come this man [Mulcaire] had hacked this phone when he [Taylor] is not royal?”

Did you not ask “Who the hell else had Mulcaire been hacking?”

Murdoch promised that lessons had been learnt, claiming his intention was for News Corp to be “as transparent as possible” in the future.

The riveting moment came when Labour MP Tom Watson revealed he had met former News of the World chief reporter Neville Thurlbeck immediately prior to the committee hearing. Watson said Thurlbeck told him that Crone had intended to show Murdoch the “for Neville” email in May 2008.

Watson quoted Thurlbeck as saying:

This is not some vague memory, I was absolutely on a knife edge. Tom [Crone] took it to him. The following week I said “did you show him the email?” He said “yes I did”. Now he can’t remember whether he showed it to Mr Murdoch or not. He said “it’s alright, it’s fine, it’s settled.”

Murdoch again denied all knowledge of the email, after which Watson accused the News Corp executive of being “the first mafia boss in history who didn’t know he was running a criminal enterprise.”

Murdoch told Watson his comment was “inappropriate”.

Reasserting his executive position, Murdoch also refused to rule out closing The Sun if evidence of phone hacking at the paper were to emerge. He said the recent arrest of Sun reporter Jamie Pyatt in connection with payments made to police officers was a “matter of great concern”, while Steve Rotheram MP told the committee that the words “the Sun” appeared in notes seized from the private investigator Glenn Mulcaire.

Murdoch also condemned the revelations this week of surveillance of hacking victims’ lawyers, calling it “appalling” and “unacceptable.”

Wrapping up the hearing, John Whittingdale MP said it was “unlikely” there would be future sessions.

The challenge now is for the committee to weigh up the contradictions between Murdoch’s account and those of Crone, Myler and Thurlbeck.