LONDON (AFP) - Rupert Murdoch sacrificed his embattled British newspaper chief Rebekah Brooks and issued his first apology over phone-hacking Friday as he tried to defuse the growing crisis on both sides of the Atlantic. As an FBI investigation spread the crisis to the United States, Murdoch finally abandoned his attempts to protect his flame-haired lieutentant and accepted Brooks' resignation as chief executive of News International. The Australian-born tycoon, 80, is also formally apologising to victims of the scandal, saying in an advertisement published in British newspapers that the News of the World tabloid was guilty of "serious wrongdoing". Brooks was editor of the paper from 2000-2003 at the time when it allegedly hacked the phone of murdered teenager Milly Dowler - the claim that sparked the crisis and led to the closure of the paper. Brooks has denied all knowledge that the practice was in use at the time. In a further show of contrition Murdoch met Dowler's parents at a London hotel to issue a personal apology, but the man whose papers once helped decide British elections faced chants of "Shame on you" from protesters. "As founder of the company I was appalled to find out what had happened and I apologised, and I have nothing further to say," Murdoch told a scrum of reporters. The departure of Brooks caps a disastrous week for Murdoch in which he has been forced to shut the 168-year-old News of the World, the foundation stone of his British empire, and scrap a buy-out of British pay-TV giant BSkyB. The 43-year-old Brooks - dubbed Murdoch's "fifth daughter" because of her closeness to the elderly magnate - told News International staff she felt a "deep sense of responsibility for the people we have hurt". "My desire to remain on the bridge has made me a focal point of the debate. This is now detracting attention from all our honest endeavours to fix the problems of the past," she wrote in an internal email. "Therefore I have given Rupert and James Murdoch my resignation. While it has been a subject of discussion, this time my resignation has been accepted," wrote Brooks, whose offer to resign last week was rejected by Murdoch. The scandal has since drawn in British Prime Minister David Cameron, politicians and the police, raising concerns over the workings of power in Britain. Cameron - himself under pressure for his friendship with Brooks and his employment of her News of the World successor Andy Coulson as his former media chief - thought her resignation was "the right decision," Downing Street said. He faced further trouble on Friday, however, when Downing Street sources admitted that he had entertained Coulson privately at Chequers, his grace-and-favour country residence, in March, two months after Coulson quit the post. Brooks will be replaced by New Zealander Tom Mockridge, chief executive of Murdoch-owned satellite broadcaster Sky Italia, who must now restore faith in the mogul's remaining British newspapers The Sun, Times and Sunday Times. Her resignation ends a meteoric rise through the ranks of Murdoch's empire, having started as a secretary at the News of World at the age of 20. She went on to edit The Sun, the country's most popular paper. It also came as a surprise, as Murdoch had only hours earlier insisted in an interview with his flagship US newspaper, The Wall Street Journal that the crisis was being handled "extremely well." But News International later said it would publish an apology in seven British national newspapers on Saturday, headed with the words "We are sorry", and bearing Murdoch's signature. "We are sorry for the serious wrongdoing that occurred. We are deeply sorry for the hurt suffered by the individuals affected," it says. Murdoch, and his son James, the chairman of News International and deputy chief operating officer of News Corp., will on Tuesday be quizzed by a committee of British lawmakers, having initially resisted. Brooks will also testify. Nine people have been arrested over the scandal so far. The latest was Neil Wallis, a former deputy editor of the News of the World under Coulson. The scandal has also embroiled the police with the revelation that Wallis had been hired by Scotland Yard Chief Paul Stephenson, prompting calls on Friday for the commissioner to quit. In the United States, the Federal Bureau of Investigation announced that News Corp. employees may have targeted the phone records of victims of the September 11 attacks.