Sky News, the British broadcaster partly owned by Rupert Murdoch, admitted on Thursday that it had illegally hacked into the emails of a man who notoriously faked his own death in a life insurance scam.

Sky News said it had authorised reporter Gerard Tubb to access emails belonging to John Darwin and his wife Anne, who faked his death in a 2002 canoe accident before starting a new life in Panama with the insurance payout.

But the broadcaster insisted the hacking was in the public interest as material provided by the channel was "pivotal" in the successful prosecution of the British couple in 2008.

"We stand by these actions as editorially justified and in the public interest," head of Sky News John Ryley said in a statement.

"We do not take such decisions lightly or frequently. They require finely balanced judgement based on individual circumstances and must always be subjected to the proper editorial controls."

But shares in the channel's owner BSkyB slid three percent following the announcement, the biggest fall of any company on London's FTSE 100 index on Thursday.

The revelation comes after a huge phone hacking scandal engulfed Murdoch's British newspaper arm News International, forcing the Australian-born tycoon to shut down the 168-year-old News of the World tabloid last July.

There was public revulsion in Britain when it emerged that the News of the World had listened to the voicemails of Milly Dowler, a murdered English schoolgirl, as well as dozens of victims of crime, celebrities and politicians.

Simon Cole, the former Sky News managing editor who authorised Tubb to break into the emails, announced his resignation on Thursday but claimed it was not connected to the hacking.

"I've been planning for some time to retire from Sky News after 17 years," he wrote on Twitter. "This is unrelated to the Darwin story. There is no linkage. Fact."

The police would not comment on whether material provided by Sky News had indeed been "pivotal" in the case against the Darwins.

"All we can say is that it formed part of the evidence that was put before the jury," a spokeswoman for Cleveland Police, the force in northeast England that investigated the case, told AFP.

In a second case of authorised hacking, Tubb, Sky News' northern England correspondent, accessed the emails of a suspected paedophile and his wife, but this did not result in any material being published or broadcast.

The channel said that "in light of the current, heightened interest in editorial practices", it had commissioned an external review of its email records and an internal audit of payment records.

Ryley said Sky News' email review was nearing its conclusion and that no grounds for concern had been found so far.

The channel is owned by pay-TV giant BSkyB, of which 39 percent belongs to Rupert Murdoch's US-based media empire News Corp.

James Murdoch, Rupert Murdoch's youngest son who is under continued pressure over phone hacking, resigned as BSkyB chairman on Tuesday saying he did not want his association with the scandal to damage the broadcaster's reputation.

The 39-year-old has always denied knowing that the illegal practice was widespread at the News of the World, but he resigned as executive chairman of News International in February.

John Darwin was jailed in 2008 for six years for his scam and his wife, who claimed just over 500,000 pounds ($793,000, $607,000) in life insurance payouts, was jailed for six and a half years. The couple were both freed last year.