Observers I have spoken to predict that News Corp’s James Murdoch will be better briefed than he was in July — and may admit to a small mea culpa — when he returns to Parliament tomorrow to answer questions about the News Of The World phone-hacking scandal. He’s expected to continue to defend his inaction about the lawbreaking in the face of mounting evidence that he must have known more about the problem earlier in the process than he previously testified. Back in July, he denied knowing until late 2008 that phone-hacking at NOTW went beyond one rogue reporter. That would clear him of the charge that he authorized hush-money earlier in the year when he approved a $1.4M settlement for a hacking victim who knew that a second reporter was involved — on the condition that the victim he keep quiet about the matter. Since Murdoch testified, senior News International executives have gone public and said James must have known the gory details because they told him. And a devastating legal opinion has come to light from lawyer Michael Silverleaf, who worked for News International and pointed out that NOTW had a culture of illegal information-gathering. There is no smoking gun to contradict James, just vague notes written up after briefing meetings with him.

What is clear is that the phone-hacking scandal has blown apart the happy succession plans Rupert Murdoch had for James at the second-biggest media conglomerate on the planet. It’s a drama of Biblical proportions: If James fails to deliver a credible performance Thursday, then Rupert will have to sacrifice his son to appease angry shareholders as well as government officials who want to know whether News Corp broke the law — as well as whether it can be trusted to have so much media power.

James is damned if he did know and damned if he didn’t. If he was made aware that phone-hacking was widespread, then why didn’t he bring in police sooner and why did the company not launch its own inquiry back in 2008, two years before News Corp finally got round to investigating wrongdoing? And if he wasn’t made aware of all this legal advice that has subsequently come to light, surely as CEO of NOTW parent News International he should have known.

The action kicks off tomorrow at 11 AM in London/3 AM PT.