Lachlan Murdoch, long regarded as a potential heir to his father Rupert, has resigned as an executive at the News Corp media empire.
Mr Murdoch, 33, will leave his post as deputy chief operating officer at the end of August but will remain on the News Corp board, the company said today.
His resignation puts his younger brother, James, the chief executive of UK satellite TV company BSkyB, in pole position to succeed their 74-year-old father at the helm of a global empire that stretches from the Fox film and TV business to newspapers such as the Sun and the Times.
Rupert Murdoch, News Corp's chairman and chief executive, said: "I am particularly saddened by my son's decision and thank him for his terrific contribution to the company... I have respected the professionalism and integrity that he has exhibited throughout his career at News Corporation."
Lachlan Murdoch said he would return to Australia with his wife, Sarah, and son Kalan.
"I would like especially to thank my father for all he has taught me in business and in life," he said in a statement. "It is now time for me to apply those lessons to the next phase of my career."
Mr Murdoch joined News Corp in 1994, starting his career cleaning presses at the Mirror newspaper in Sydney.
A graduate of Princeton University, he joined the News Corp board in 1996 and has had a variety of jobs, most recently serving as deputy chief operating officer and publisher of the New York Post tabloid newspaper.
He is chairman of News Corp's US television business and of News Limited, the parent company of the group's Australian operations.
He also has management responsibility for publisher HarperCollins and for News America Marketing, News Corp's inserts business.
Today's announcement makes 32-year-old James Murdoch the heir apparent in the Murdoch family, but at one stage it was Lachlan who was seen as most likely to succeed their father.
In an interview for a book in 1997, Rupert Murdoch suggested Lachlan was the chosen son.
"Currently it is their consensus that Lachlan will take over," he said then. "He will be the first among equals, but they will all have to prove themselves."
Five years later, by which time daughter Elisabeth had dropped out of contention, he assessed his sons' relative merits again.
"Lachlan, he has great leadership abilities, he has shown it in Australia," Mr Murdoch said. "James has got great business abilities. He has done a fantastic job down there [in Asia, when he was at Star TV].
"He has not really had the love or closeness of newspapers that Lachlan has. He has not had that same experience yet, but there is plenty of time.
"I think they are very close and they will get on extremely well. It [the future leadership] will be more shared than it seems at the moment."
James's credentials received a major boost when he became Sky's chief executive in November 2003.
But whoever takes over could face a long wait: Rupert Murdoch told shareholders at the company's 2003 annual general meeting that his retirement plans had been put on hold "forever" and that he would have to be "carried out".
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