The phone hacking thing is just a smokescreen for a whole load of government corruption which involved the leaders of both major parties over a 15 year period, and which influenced the award of major government contracts to a number of leading businesses.
Matthew Freud and Elisabeth Murdoch have so far escaped attention, but it's they who brokered the relationships between the press and politicians; the politicians in turn who made it easier for Shine and especially Freud Communications' clients to do business.
Matthew Freud knows everyone, and has dirt on everyone. His parties are legendary for their debauchery, which he encourages. Everyone is frightened of him, frightened of what he knows, and frightened of who he knows. Want to know how Tony Blair got so rich so quick? Matthew will tell you.
The powers that be are protecting him in order to protect themselves. Rebekah Brooks and possibly James Murdoch are going to take the rap for this, but are not the ones pulling the strings. Sienna Miller, Millie Dowler etc are all a distraction from the less sexy but infinitely worse skullduggery going on behind closed doors.