Rupert Murdoch pledged unwavering support to his scandal-hit Sun on Friday, and promised to launch a Sunday edition soon, to try to win back angry staff in one of the biggest challenges to his more than 40 years as proprietor at the British tabloid.

Murdoch was in London to reassure staff after the company supplied information to police which led to the arrest of some of the most senior journalists on the paper in an investigation into illegal payments to public officials.

In a typically bold move, the 80-year-old said that News Corp would soon launch a Sun on Sunday paper to replace the News of the World which was abruptly shut last year after an inquiry into telephone hacking to get stories.

I've worked alongside you for 43 years to build The Sun into one of the world's finest papers, Australian-born Murdoch said in an email to staff ahead of an appearance on the news room floor which had been expected to be acrimonious.

It is a part of me and is one of our proudest achievements.

My continuing respect makes this situation a source of great pain for me, as I know it is for each of you, he said.

The arrests sparked a damaging row within News Corp's British newspaper arm not seen since bitter and violent clashes in the 1980s over a radical overhaul of print unions which transformed the British industrial landscape during the era of Prime Minister Margaret Thatcher.

Coming on the back of the closure of his 168-year-old News of the World tabloid, the latest row could further weaken Murdoch's influence in Britain and prompted many to consider whether he would quit British media altogether.

I am staying with you all, in London, for the next several weeks to give you my unwavering support, Murdoch said.

I am confident we will get through this together and emerge stronger.

Murdoch brought the Sun in 1969 and swiftly turned it into a sensationalist daily tabloid, renowned for political clout, campaigns, entertainment stories and sex scandals, banner headlines and topless Page 3 girls.

At the heart of his problem is the secretive committee set up by Murdoch to work with the police, which has handed over information after trawling through 300 million emails, expense accounts and notebooks in the hunt for signs of criminality.

Murdoch said the committee would continue to work with the police and said illegal activity would not be tolerated, however in a climb-down he said those journalists who had been arrested would have their suspensions lifted and could return to work.

I am confident we can live by these commitments and still produce great journalism, he said. We will build on The Sun's proud heritage by launching The Sun on Sunday very soon.

Finally some good news, one member of staff said. Another described the fact that the arrested Sun employees could return to work as heart-warming news.

IMMENSE PRESSURE

It was unclear whether his words would fully placate staff however, who feel they have been hung out to dry after competing fiercely for years in a highly pressurized environment to break news and keep the Sun ahead of its rivals.

You were under immense pressure to get a story, one former Sun journalist told Reuters on condition of anonymity. You go to bed thinking what am I going to bring in tomorrow. You had the news editors bellowing down the phone.

Andrew Neil, a Murdoch editor for 11 years on the Sunday Times, had told Reuters that the row had been a disaster and said the once all-powerful owner appeared to have effectively lost control of the process.

The Sun has turned against Rupert Murdoch, Neil told Reuters, ahead of the announcement. He has put in place things he cannot stop. He's doing what he had to do to save his corporation in the U.S. but he's losing the trust of his UK journalists in the process.

The Sun was the (UK paper) most loyal to Murdoch. It was closest to his heart. Now Sun journalists believe he has launched a witch-hunt to protect himself. He won't be welcomed.

Despite the good news on the new Sunday edition, the distrust towards the internal group, called the Management and Standards Committee, is likely to remain.

It reports directly to executives in News Corp's New York headquarters where staff are less attached to Murdoch's newspapers and where there is a clear sense of shock at the antics of their British colleagues.

The MSC believes it has had little choice but to cooperate with the police and Murdoch said it would continue in that role.

It was set up in part after two of its members, the award-winning former editor of the Daily Telegraph Will Lewis and the PR executive Simon Greenberg, endured a severe dressing down from the female officer overseeing the investigation.

It was also designed to show, particularly in the United States, that the group was doing all it could to cooperate and to detoxify its assets.

The most recent arrest of five senior staff, a police officer and other public officials had also raised fears that the identities of anonymous sources were handed over to police, breaking the journalistic code of protecting sources.

In a sign of the depth of the rebellion, Trevor Kavanagh, the Sun's associate editor and previously seen as unfailingly loyal to Murdoch, toured broadcast studios earlier this week to lambast the company and the heavy handedness of the police who detained the staff in dawn raids in the early hours of last weekend.

(Additional reporting by Mark Hosenball, Mike Holden; Editing by Ben Harding)

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