LONDON (AFP) - British Prime Minister David Cameron backed calls for a public inquiry into phone hacking Wednesday after a tabloid targeted relatives of murdered children and possibly victims of the London bombings. But he said police should first complete its probe of the "absolutely disgusting" allegations concerning the News of the World, the top-selling Sunday newspaper owned by Rupert Murdoch's News International. In his first statement on the affair, Murdoch condemned the claims as "deplorable and unacceptable" and said his company would "fully and proactively co-operate with the police". Ahead of an emergency debate in the House of Commons, Cameron said: "We do need to have an inquiry, possibly inquiries, into what has happened. "Let us be clear -- we are no longer talking here about politicians and celebrities, we are talking about murder victims, potentially terrorist victims having their phones hacked into. "It is absolutely disgusting what has taken place." He admitted questions needed answering on why an initial police probe in 2006 failed to uncover the latest claims, and on media ethics and practices. But Cameron rejected calls by opposition Labour leader Ed Miliband for an immediate public inquiry "because you must not jeopardise the police investigation". Cameron also refused to back Miliband's call for the resignation of Rebekah Brooks, the chief executive of News International who was editor of the News of the World when the hacking allegedly took place in 2002.And he insisted the row should not affect the government's decision, due within days, on whether Murdoch's News Corp. should be able to proceed with its controversial bid to take full control of satellite broadcaster BSkyB. News of the World has been dogged by claims of phone hacking since its royal editor and a private investigator were jailed for the practice in 2007, and fresh allegations sparked a new police investigation in January. Most of the victims identified so far have been politicians and celebrities, but it has now emerged that relatives of those killed in the July 7, 2005 attacks on the London transport network were also targeted. Graham Foulkes, whose son David died in the attacks, told the BBC it was "just horrendous" to think someone had been listening to his calls. Police said the parents of Holly Wells and Jessica Chapman, two 10-year-old girls murdered in Soham, eastern England, in 2002, may also have been targeted. The most shocking revelation was that journalists hacked the voicemail of murdered teenager Milly Dowler after her disappearance in 2002, and even deleted some messages, potentially disrupting the police investigation. Simon Greenberg, News International's director of corporate affairs, told BBC radio it was "very close" to establishing who hacked Dowler's phone. In the House of Commons, however, Miliband called on Brooks to quit, saying: "She should take responsibility and stand down." As major companies including Ford and Mitsubishi withdrew their advertising from the tabloid over the scandal, Murdoch stepped in to limit the damage and give Brooks his full support. "Recent allegations of phone hacking and making payments to police with respect to the News of the World are deplorable and unacceptable," he said. "I have made clear that our company must fully and proactively co-operate with the police in all investigations and that is exactly what News International has been doing and will continue to do under Rebekah Brooks' leadership." In an email to staff on Tuesday, Brooks said she was "sickened" by the new allegations and said it was "inconceivable" she had sanctioned the hacking. Meanwhile a related scandal was brewing over Andy Coulson, a former News of the World editor who worked as Cameron's director of communications until he resigned in January. Police said Wednesday they had evidence suggesting journalists had illegally paid police officers for information. Reports suggest Coulson was editor at the time, although he has always denied wrongdoing.