A phone-hacking scandal engulfing Rupert Murdoch's media empire grew on Thursday with claims that Britain's top-selling tabloid may have listened to the voicemail of relatives of soldiers killed in Iraq and Afghanistan.

News International, the parent company of the News of the World tabloid, said it would be contacting the Defense Ministry after a report in the Daily Telegraph that the phone numbers of British soldiers were found in the files of a private investigator jailed for hacking phones.

If these allegations are true we are absolutely appalled and horrified, it said in a statement.

Rose Gentle, the mother of fusilier Gordon Gentle, killed by a roadside bomb in Iraq's oil port of Basra in 2004, told the BBC she was totally disgusted by the allegations.

I'd never buy that paper again, if this is true, they need to be brought to justice for this, they need to pay for this, she said.

In a further twist to the affair, a spokesman for Finance Minister George Osborne said police had told the minister his name and home phone number were in notes kept by two people jailed for phone hacking.

The scandal, which has cast an unflattering light on the way British tabloid newspapers work, dominated the front pages of almost every major British newspaper on Thursday.

The main allegation is that journalists, or investigators hired by them, took advantage of often limited security on mobile phone voicemail boxes to listen to messages left for celebrities, politicians or people involved in major stories.

The disclosure that the phone hacking involved victims of crime came when it emerged that a private detective working for the News of the World hacked into voicemail messages left on the mobile phone of a murdered schoolgirl while police were searching for her. That allegation caused outrage among Britons and prompted an emergency debate in parliament on Wednesday.

The list of those whose phones may have been hacked continued to grow. It includes victims of the July 7, 2005 London transport bombings, when Islamist suicide bombers killed 52 people, and the parents of Madeleine McCann, a British girl who disappeared in Portugal four years ago.

The Independent carried the headline Murdoch empire in crisis, while the left-leaning Guardian ran with The day the prime minister was forced to act on phone hacking.

Prime Minister David Cameron said on Wednesday he was revolted by allegations that News of the World investigators eavesdropped on the voicemail of victims of crimes and said he would order an inquiry.

But he resisted calls to put an end to attempts by Murdoch to buy out BskyB, a news and entertainment broadcaster, in which he has a minority stake.

Murdoch, whose News International group is being boycotted by some advertisers and outraged readers, kept a low profile at a Sun Valley conference on Wednesday.

He said earlier he found the allegations of hacking, and reports that journalists also bought information from police, deplorable and unacceptable. He has appointed News Corp executive Joel Klein to oversee an investigation.

The News of the World's royal correspondent and an investigator were jailed in 2007 for hacking into the phones of royal aides. After campaigning by celebrities and politicians who suspected they too had been spied on, police launched a new inquiry in January.

The News of the World is Britain's best-selling Sunday newspaper, read by some 7.5 million people on sales of 2.6 million. Sales of its daily sister paper the Sun never recovered in Liverpool after it offended the city's football fans in the wake of the 1989 Hillsborough stadium disaster.

(Reporting by Karolina Tagaris; Editing by Janet Lawrence)

Phone Hacking