LONDON – The Murdoch media empire unexpectedly jettisoned the News of the World on Thursday after a public backlash over the illegal guerrilla tactics it used to expose the rich, the famous and the royal in order to remain Britain’s best-selling Sunday newspaper.

The abrupt decision stunned the paper’s staff of 200, shocked the world’s most competitive news town and ignited speculation that Rupert Murdoch’s News Corp. plans to rebrand the tabloid under a new name in a bid to prevent a phone-hacking scandal from wrecking its bid for a far more lucrative television deal.

“This Sunday will be the last issue of the News of the World,” James Murdoch, son of the media magnate, announced in a memo to staff.

Mushrooming allegations of immoral and criminal behavior at the paper — including bribing police officers for information, hacking into the voice mail of murdered schoolgirls’ families and targeting the phones of the relatives of soldiers killed in Afghanistan and the victims of the London transit attacks — cast a dark cloud over News Corp.’s multibillion-dollar plan to take full ownership of British Sky Broadcasting, an operation far more valuable than all of Murdoch’s British newspapers.

Faced with growing public outrage, political condemnation and fleeing advertisers, Murdoch stopped the presses on the 168-year-old newspaper, whose lurid scoops have ranged from Sarah Ferguson’s claims she could provide access to ex-husband Prince Andrew to motor racing chief Max Mosley’s penchant for sadomasochism.

James Murdoch said all revenue from the final issue, which will carry no ads, would go to “good causes.” The paper has been hemorrhaging advertisers since the phone hacking scandal escalated this week, with companies including automakers Ford and Vauxhall, grocery chain J. Sainsbury and pharmacy chain Boots pulling ads from the paper.

Police say they are examining 4,000 names of people who may have been targeted by the tabloid, which sells about 2.7 million copies a week.

The paper has acknowledged hacking into the messages of politicians, celebrities and royal aides, but maintained for years the transgressions were confined to a few rogue staff. A reporter and a private investigator working for the paper were jailed for hacking in 2007.

But in recent days the allegations have expanded to take in the phone messages of 13-year-old Milly Dowler, who disappeared in 2002 and was later found murdered, as well as the families of two other missing schoolgirls.

James Murdoch said if the allegations were true, “it was inhuman and has no place in our company.”

“Wrongdoers turned a good newsroom bad,” he said, “and this was not fully understood or adequately pursued.”

At News of the World, Features Editor Jules Stenson said the news was met with gasps and some tears. “No one had any inkling,” he told reporters outside the company’s London headquarters. “There was no lynch mob mentality, there was just a very shocked acceptance of the decision.”

Some suspected shutting the paper was a ploy to salvage Murdoch’s British media empire as well as the job of Rebekah Brooks, the trusted chief executive of his British news operation.

“News Corp. has taken a bold decision to stop printing the News of the World and close the title. Mr. Murdoch was clearly not willing to jeopardize his bid for BSkyB,” said markets analyst Louise Cooper of BGC Partners in London. “Murdoch has shown what a brilliant operator he really is.”

Brooks, editor of News of the World at the time of the eavesdropping allegations, has maintained she did not know about it. James Murdoch said he was “satisfied she neither had knowledge of nor directed” the phone hacking.

Former Deputy Prime Minister John Prescott, one of the tabloid’s alleged hacking victims, said closing the paper would not resolve the problems at News International.

“There is still … the same culture,” he said, “and that’s why there has be a public inquiry into it. I cannot accept for a moment that at the top of the company, Mr. Murdoch — and certainly Rebekah Brooks — didn’t know what was going on.”

But Charlie Beckett, director of the POLIS media institute at the London School of Economics, said it was a bold move aimed at resolving a situation that had got out of control.

“This is a fantastically brave move to try and cleanse everything and put a stop to it,” Beckett said.

Rupert Murdoch refused to discuss the situation Thursday. “I’m not making any comments,” he said when ambushed by reporters at a conference in Sun Valley, Idaho.