Amid outrage over claims that murder victim Millie Dowler's phone had been hacked by the News of the World, the scandal appeared to be heading dangerously close to engulfing Westminster.
The Coalition Government was under intense pressure to reveal the extent of its dealings with the Murdoch empire with allegations that politicians, including the Prime Minister, had been cosying up to Rupert Murdoch and his lieutenants.
The announcement, alongside the setting up of a number of other reviews into the scandal, immediately eased the growing crisis.
But the Prime Minister could now be forgiven for ruing that decision.
Yesterday's explosive evidence has placed intense pressure over the role played in the £8 billion bid for BSkB by his Culture Secretary Jeremy Hunt – himself brought in because his predecessor, Vince Cable, was judged to be biased against the deal after telling an undercover reporter that he would wage "war" on Murdoch.
But it has also refocused the spotlight on the Prime Minister himself.
Among James Murdoch's testimony was a suggestion that he and Mr Cameron had discussed News Corporation's controversial takeover bid over a Christmas meal.
That the subject was discussed at a dinner hosted by Rebekah Brooks, the former Sun editor and member of he "Chipping Norton set", will only add to the pressure.
Embarrassingly for the Coalition, he also appeared to suggest that he discussed it with another senior minister as well, saying: "I recall one conversation with the Chancellor of the Exchequer, George Osborne, about the bid."
And, of course, Mr Murdoch Jr was only the first act in this unfolding drama.
His father, Rupert, the News Corporation chief executive, is due to appear before the inquiry today with two days of questioning set aside. He will be giving evidence at the same time as Mr Cameron stands up for his weekly joust with the opposition at Prime Minister's Questions.
This will be widely viewed as an open goal for Labour leader Ed Miliband who has led criticism of the Coalition Government over the issue.
In the coming days Mr Cameron will face intense pressure to explain what he discussed, when and with whom.
But that could be nothing to what he experiences within weeks. For the Prime Minister, who repeatedly said that he never had "one inappropriate conversation", over the proposed takeover not only set up the Leveson Inquiry but he has agreed to appear before it.
He will be hoping that the latest storm has blown over by then.
Following the disastrous political rows over the last few weeks, including granny tax, pasty tax, the fuel strike fiasco and allegations of farcical scenes surrounding the attempt to deport terror suspect Abu Qatada, Mr Cameron needs some good news soon.