MARBELLA CLUB

The News Corporation boss, 81, offered his support to Sun journalists at News International's offices in Wapping.

Ten current and former senior staff at the paper have been arrested since November in connection with alleged corrupt payments to public officials.

Mr Murdoch lifted all staff suspensions pending police inquiries, a move Labour MP Chris Bryant called "cynical".

The high-profile campaigner against and victim of phone hacking, said the decision to lift the suspensions was hypocritical.

"It is massively premature because one would have thought the Murdoch empire would want to wait until Leveson had completed his inquiry and the police and prosecuting authorities had completed their investigations," he said.

"News International has tirelessly campaigned for people who have been charged to be suspended from public office and yet journalists who have been charged at News International are apparently not going to be suspended."

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Analysis

Torin Douglas

BBC media correspondent

Rupert Murdoch's decision to go ahead with the Sun on Sunday is a typically bold move, designed to restore journalists' morale and regain the initiative, but many uncertainties remain.

It was widely believed that the replacement for the News of the World had been suspended indefinitely after the fallout from the phone-hacking scandal spread to other Murdoch papers.

The arrest of so many senior Sun journalists seemed to make the launch of a seventh-day Sun impractical.

And the American parent company News Corp was known to be disenchanted with the UK newspaper business.

Will it really want to invest more money in it at a time of such legal and financial uncertainty?

Mr Bryant was awarded £30,000 in damages after his phone was hacked by the now defunct News of the World (NoW). Lord Justice Leveson's ongoing inquiry is examining press standards and ethics.

In an email to staff, Mr Murdoch said: "We will build on the Sun's proud heritage by launching the Sun on Sunday very soon.

"Having a winning paper is the best answer to our critics."

He said he would stay in London for the next several weeks but, describing the recent arrests as a "great source of pain", warned: "Illegal activities simply cannot and will not be tolerated".

But Mr Murdoch praised the "superb work" of Sun journalists and said "the Sun is a part of me".

The company was doing everything it could to assist those who had been arrested, his email said.