London, Jan. 21 (Reuters): The British Prime Minister’s media chief quit today over allegations of phone hacking at the newspaper he used to edit, a move that could embarrass the Prime minister and complicate News Corp’s bid to buy BSkyB.

Critics who have questioned Prime Minister David Cameron’s judgment in appointing Andy Coulson as his communications chief said they felt vindicated. Coulson resigned as editor of Sunday tabloid newspaper News of the World in 2007 after one of his reporters was jailed for secretly listening to phone messages of royal household staff.

The newspaper is owned by Rupert Murdoch’s News Corp, which is waiting to hear if the government will clear its planned $12 billion buyout of pay TV operator BSkyB or refer the deal to competition authorities for further checks. “Continued coverage of events connected to my old job at the News of the World has made it difficult for me to give the 110 per cent needed in this role,” said Coulson, who has always denied any knowledge of wrongdoing at the newspaper. “When the spokesman needs a spokesman it’s time to move on,” he said in a statement.

Cameron has repeatedly defended Coulson, one of his inner circle, and today defended his own judgment in hiring him after his resignation from the News of the World. “I feel that he’s been punished twice for the same offence,” Cameron said.