Rupert Murdoch said on Friday people would be 'crazy' to believe pay-TV piracy claims against News Corp. as new allegations were published that a unit of his company paid British police for 'assistance'.

The news giant is battling allegations in the media that it used hackers to undermine security systems used by On Digital in Britain and sabotaged its competitors Austar and Optus in Australia.

The claims relate to a unit within News Corp, subsidiary News Datacom Systems, later known as NDS, which was sold to technology giant Cisco for US$5 billion this month.

The Australian Financial Review, owned by News Corp's local rival Fairfax Media, has been running a series of allegations since Wednesday after a four-year probe based on a cache of 14,000 emails.

An investigation was also aired this week in the UK by the BBC's flagship current affairs television show, Panorama.

Murdoch used Twitter on Thursday to lash out at the BBC and on Friday turned his focus to Fairfax.

"Proof you can't trust anything in Australian Fairfax papers, unless you are just another crazy," the News Corp chairman tweeted.

The newspaper on Friday published more allegations against the Murdoch empire, including that NDS had a budget account to provide 'a contingency sum for police informants'.

This, an email said, was 'to pay them for assistance given to us in our work'.

The newspaper said emails, which reportedly came from the hard drive of a former security chief at NDS, showed NDS operated the account from early 2000 and paid Surrey police in Britain 2,000 pounds that September.

Surrey police have previously been linked to the British phone-hacking scandal that forced the closure of News Corp's flagship UK Sunday tabloid the News of the World.

The Financial Review cited NDS as saying the 2,000 pound payment was a 'one-off charitable donation'.

NDS, like News Corp, has categorically rejected all the claims and executive chairman Abe Peled on Friday demanded a full retraction from the newspaper, a day after he requested the same from the BBC.

"The truth is that NDS is a leader in the fight against piracy," Peled said in a letter to Financial Review editor-in-chief Michael Stutchbury.

"And the truth is that NDS has assisted law enforcement agencies around the globe in bringing to justice many of the pirates your articles falsely portray as victims."

Stutchbury said the paper 'fully stands' by its reports, adding that: "Legal correspondence confirms the authenticity of the emails."

The BBC also issued a statement saying it was aware of News Corp's rejection of the allegations but 'we stand by the Panorama investigation'.

The Australian Financial Review has claimed a secret unit of former policemen and intelligence officers within News Corp known as 'Operational Security' crippled the finances of competitors such as Austar and Optus.

They did so by cracking the codes of smart cards issued to customers of the services and then selling them on the black market, giving viewers free access and costing the broadcasters millions of dollars, it said.

It said this happened in the 1990s, at a time when News Corp was moving to take control of the Australian pay-TV industry.

Austar chief executive John Porter, who has led the regional pay-TV company since it launched 1995, rubbished the claims on Friday. "I find this story to be so farcical that I really don't think it is worthy of my time," he said.

His comments came with Austar shareholders due to meet to vote on a Aus$2.5 billion takeover bid by Foxtel, which is 25 per cent owned by News Corp.