LONDON, July 8 - Opposition leader Ed Miliband dismissed Britain's press watchdog as a toothless poodle on Friday, and said the closure of the News of the World should not let Rupert Murdoch's most senior newspaper executive off the hook.

Speaking a day after Murdoch's News Corp shut down the News of the World tabloid at the heart of a phone hacking scandal, Miliband said Rebekah Brooks, the newspaper's former editor and now chief executive of the group's British newspapers, should also pay the price.

I've made no secret of my view that Rebekah Brooks should take responsibility for what happened while she was editor of The News of The World, Miliband told an audience at a Thomson Reuters event.

She was the editor at the time, she should take responsibility for that and I don't think frankly closing down the News of the World changes that.

Prime Minister David Cameron told reporters later on Friday: It has been reported she (Brooks) offered her resignation and in this situation, I would have taken it.

Miliband said the Press Complaints Commission had totally failed to tackle the hacking scandal, which has engulfed Rupert Murdoch's global media empire.

It failed to get to the bottom of the allegations about what happened at News International in 2009, he said. Its chair admits she was lied to but could do nothing about it.

The PCC was established to be a watchdog. But it has been exposed as a toothless poodle. Wherever blame lies for this, the PCC cannot restore trust in self-regulation. It is time to put the PCC out of its misery.

Britain's biggest-selling Sunday newspaper will publish for the last time this weekend.

Allegations that News of the World journalists hacked the voicemail of thousands of people, from child murder victims to the families of Britain's war dead, have outraged readers and posed a growing threat to Murdoch's hopes of buying out broadcaster BSkyB.

Cameron is also embroiled in the scandal after he hired ex-News of the World editor Andy Coulson as his communications director.

(Coulson) is now, as I understand it, under police investigation, as others will be, Cameron told a news conference on Friday.

That police investigation has got to go ahead unhindered, without fear or favor as I said.

Coulson, who resigned from his government communications role in January, was arrested on Friday on suspicion of conspiring to intercept communications and suspicion of corruption, police said.

(Reporting by Karolina Tagaris and Paul Sandle; Editing by Janet Lawrence)

(This story was corrected to add dropped words scrapping of in headline)

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