Jeremy Hunt has said News Corporation still has questions to answer about why Rupert Murdoch and other executives did not know about the extent of phone hacking at the News of the World.
The culture secretary told the BBC he was "shocked" that "people at the top" did not know about wrongdoing.Mr Murdoch said he had been "betrayed" by some staff at News International.
He has sent an e-mail to all employees, saying that those responsible must "be held accountable under the law".
Prime Minister David Cameron will make a statement to MPs later about the hacking scandal.
While giving further details about the judicial inquiry into alleged police corruption and the future of press regulation, he is likely to face more questions about his decision to hire ex-News of the World editor Andy Coulson as his PR chief and claims that he ignored repeated warnings about the move.
'Worrying' In his evidence to the Commons culture committee on Tuesday, Mr Murdoch said he only learnt that phone hacking was more widespread at the paper than originally claimed at the start of the year - when the company passed new information over to the police.
He said he felt "betrayed" by certain executives within News International but did not pinpoint those he felt were responsible so as not to prejudice the police investigation.
Mr Hunt, who has responsibility for media regulation, said he was "worried" by what had been said by Mr Murdoch and his son James - chairman of News International."The question that News International have to answer is why malpractice happened throughout a very important part of their organisation without people like Rupert Murdoch knowing.
"What shocked me listening yesterday was the fact that so much wrongdoing seemed to happen without the knowledge of the people at the top.
"And they did say that apology is not enough - they have to demonstrate through what they do, not what they say, that they are putting it right.
"But it does seem like a huge amount was going wrong in that organisation and no-one felt it necessary to tell the person at the top and I think that is something that will have worried a lot of people."
'Judgement call' Mr Hunt also defended the prime minister's handling of the crisis after Mr Cameron was forced to cut short a trip to Africa and return to take part in a Commons debate on Wednesday sought by Labour.
"What we have seen is that he has recalled Parliament, he has got an independent police inquiry, he has got an independent judge-led inquiry, he has published all the meetings that they have with media owners and said in the future ministers will publish all the meetings that they have with media proprietors.
"So he has done more in a couple of weeks than I think any other prime minister has done in a couple of decades and I think that is the key judgement call that the people of Britain will be looking for him to make."
But Labour say Mr Cameron must answer questions about the role of his chief of staff, Ed Llewellyn, who they say was twice given important information relating to phone hacking and "refused to pass it on" to the prime minister.
"He (David Cameron) knows he took a risk in employing Andy Coulson and that has not paid off - it was a mistake to have done so," said Labour MP Chris Bryant.
"But on top of that we have got this impression of lots of people trying to tell the prime minister not to go ahead with this but nobody in Downing Street ever letting the prime minister hear bad news."
The BBC's Political Editor Nick Robinson said cabinet secretary Gus O'Donnell had made it clear that it would have been totally inappropriate for the prime minister to get any private briefing from the police about an inquiry.
But he said the real test was whether Mr Cameron could convince MPs and the public that he had done all that needed to be done.
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