* Murdoch's Sun tabloid in focus after staff arrests
* Public, political outcry over corruption probe muted
* Angry staff could pose biggest threat to Murdoch
LONDON, Feb 12 (Reuters) - Rupert Murdoch is under pressure over his Sun tabloid after the arrests of several senior staff in a corruption probe, but whistleblowers inside his media empire may pose more of a threat than the public outrage that forced the closure of its sister paper.
Murdoch closed his News of the World weekly after allegations last year it hacked the phone of a murdered schoolgirl prompted a public outcry. Advertisers cancelled contracts and Prime Minister David Cameron set up a inquiry into media practices.
News Corporation boss Murdoch closed the newspaper and flew to London to handle the crisis, which triggered such hostility in Britain's parliament bid that he was forced to give up his bid to take over lucrative pay-TV operator BSkyB.
The veteran media mogul is due to fly to London later this week as another scandal engulfs one of his British newspapers, but he is likely to handle the Sun crisis differently given the public response to the paper's alleged actions is muted.
Police have arrested nine current and former Sun staff in the past two weeks, including the deputy editor and other senior employees, as part of an investigation into the bribing of police and other public officials for information.
The arrests came after News Corp passed information to police, angering employees, some of whom are already briefing against Murdoch.
But while the News of the World (NoW) scandal led to a chorus of condemnation from the public and politicians of all stripes, there has been a low-key response to the Sun arrests.
In a sharp contrast to the mood that prevailed at the height of the NoW scandal last summer, the British minister responsible for the media on Sunday praised Murdoch for increasing British media plurality through his Sky satellite broadcasting network.
"Rupert Murdoch, through the investment he made in Sky for example, has massively increased choice in the UK and given us one of the most competitive broadcasting markets in Europe," Jeremy Hunt told the BBC.
He also praised newspapers, including the News of the World, for uncovering criminals and holding politicians to account.
"People remember how important our newspapers are. I think about the MP (member of parliament) expenses scandal .... People are realising how important a free press is in our democracy," he added.
Last year, Cameron labelled allegations that the News of the World hacked into the phone of murdered school girl Milly Dowler as "really appalling", "truly dreadful" and called for a "vigorous investigation".
PUBLIC INTEREST DEFENCE?
"The backlash on bribing policemen is not going to be on the same scale as hacking into private phone messages," said Ivor Gaber, political journalism professor at City University London.
"The Sun is a bigger proposition than the News of the World. It makes more money. It has more clout and it's six days a week," he added.
Gaber said possible payments to police or other officials may be covered by a public interest defence that was not available in the News of the World hacking case.
"I think there's more of a debate to be had. It's less black and white," he said.
Hunt praised the Daily Telegraph for its stories about MP expenses even though it had paid a mole for the information on leaked computer disks.
In a statement late on Saturday, the chief executive of News Corp's British newspaper division News International Tom Mockridge indicated Murdoch was far from throwing in the towel.
"Some of the individuals arrested have been instrumental in breaking important stories about public bodies, for example the scandal of our under resourced troops in Iraq .... We must take care not to pre-judge the outcome of the police interviews," he said.
Two of those arrested along with the Sun employees on Saturday in connection with illegal journalist payments were a defence ministry employee and a member of the armed forces, a source said.
THREAT FROM WITHIN
Nevertheless, Murdoch critics say the pressure on News Corp should not be underestimated, especially as some disgruntled News International staff are briefing against him.
The arrest of Sun staff in the last fortnight was the result of information supplied to the police by News Corp's Management and Standards Committee (MSC), a fact-finding group the firm set up in a bid to rescue its reputation.
A source at News International's Wapping office in London said staff were in uproar at what they feel is News Corp sacrificing ordinary employees to protect top executives.
Many staff during the NoW episode said Murdoch was trying to protect his News Corp executive son and presumptive heir James, and Murdoch confidante and former News of the World editor Rebekah Brooks.
"The company has turned against the staff," said the Wapping source on condition of anonymity.
Lawmaker Tom Watson, one of Murdoch's most trenchant critics who last year questioned him and his executive son James over phone-hacking at a parliamentary committee hearing, said a number of News International staff had asked him for help, including two since the arrest of Sun employees.
"A number of staff within News International are talking to me privately .... What you're seeing now is greater willingness of staff on the frontline .... to talk about the conditions they worked under and it's not pleasant listening," he told Reuters.
He said they told him of a culture of bullying by senior staff and a high pressure office culture that led to journalists doing things they were extremely uncomfortable with.
"We are now seeing three of Rupert Murdoch's newspapers investigated for different things ranging from phone hacking to email hacking to potentially bribing public officials," he said, referring to email hacking at Murdoch's highbrow daily The Times.
"There comes a point where you have to say 'How has this institution potentially allowed these things to go on for so long?'. And that's down to the leadership of Rupert Murdoch."