The culture committee questioned journalists and bosses at the now-closed News of the World, as well as police and lawyers for hacking victims.
Its report has concluded that Mr Murdoch exhibited "wilful blindness" to what was going on in News Corporation.
But the committee was split six to four with Tory members refusing to endorse the report and branding it "partisan".
Conservative Louise Mensch called it "a real great shame" that the report's credibility had potentially been "damaged" as a result, with the report carried by Labour and Lib Dem members backing it.
News Corp said in a statement it was "carefully reviewing" the report and would "respond shortly", adding: "The company fully acknowledges significant wrongdoing at News of the World and apologises to everyone whose privacy was invaded."
The committee itself does not have the power to impose sanctions, but it raised the possibility of a vote in the House of Commons about whether witnesses had been in contempt of Parliament - and if so, whether those witnesses should be forced to apologise in Parliament.
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It will give ammunition to those News Corporation shareholders who would like to loosen the hold over the company of the Murdoch dynasty”
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The BBC News Channel's chief political correspondent Norman Smith said the report was much more damning than had been anticipated and directly questioned the integrity and honesty of Rupert Murdoch.
BBC business editor Robert Peston said it would push Ofcom, the media regulator, closer to the conclusion that BSkyB - 39% owned by News Corp - is not fit and proper to hold a broadcasting licence.
Reacting to the report, an Ofcom spokesman said it was "continuing to assess the evidence - including the new and emerging evidence" that may assist it in ruling on that issue.
'A blind eye'