James Murdoch's future is hanging in the balance after News Corp's shareholders lodged a massive protest vote

. Photograph: David Cheskin/PA

James Murdoch's future at News Corporation looks increasingly precarious as shareholders delivered a damning verdict on his tenure amid widespread criticism of his handling of the hacking scandal.

Following a contentious meeting in Los Angeles last week News Corporation shareholders lodged a massive protest vote against James and his brother Lachlan Murdoch.

A majority of independent shareholders voted against the re-election of chairman Rupert Murdoch's sons James and Lachlan Murdoch. James Murdoch received the largest vote against his re-election at 35%.

James, 38, faces a second grilling in the Parliament next month over phone-hacking at The News of The World, one of News Corp's UKnewspapers. Some 34% of shareholders voted against Lachlan Murdoch 40.

After subtracting the shares controlled by Rupert Murdoch, 67% of the votes went against James Murdoch and 64% against Lachlan, said Julie Tanner, assistant director of News Corp investor Christian Brothers Investment Services (CBIS), who last week called for Rupert Murdoch to step down as chairman after the "extraordinary scandals" at the company. "Shareholders are saying loud and clear that this board has failed as a group," she said.

Rupert Murdoch, chairman and chief executive officer, proved far more popular with investors, receiving 86% of votes, although a sizeable number of shareholders, representing 12 million votes, abstained.

The votes are a particular embarrassment as Murdoch went into the meeting with at least 47% of voting shares on his side, thanks to the family's control of the company's voting shares and the support of their largest outside shareholder, Saudi Prince Alwaleed Bin Talal.

Thanks to the Murdoch's controlling share interest the company defeated attempts to throw the Murdochs and others off the board from major shareholders including the giant Californian pension funds CalPERS and CalSTRS, the Church of England and Hermes, the BT pension fund.

A combative Murdoch faced hostile shareholders at the company's meeting in Los Angeles on Friday and said News Corp was dealing with the situation. While he acknowledged the seriousness of the hacking scandal Murdoch described attacks on News Corp as "unfair" and said the company was the "stuff of legend."

Shareholder critics called for the Murdochs to step down at the meeting and criticised the pay deals of the company's top executives.

The firm delayed releasing the results of the ballot until late Monday. Father Seamus Finn of the Interfaith Center on Corporate Responsibility, who attended the meeting, said: "The vote clearly demonstrates a profound lack of confidence in this company's leadership."

Earlier Les Hinton, former chairman of News International, which runs the company's UK newspapers, had defended James Murdoch saying he saw no reason why he should resign his position.

Michael Wolff, Murdoch biographer and author of The Man Who Owns the News, said it was now inevitable that James Murdoch would leave.

"James will probably go by himself, that's what everybody will be waiting for. I wonder too if Lachlan will step off the board. But could this drag on for another year? Yes."

Wolff said the size of the vote against Murdoch's son had created "a very difficult family moment."

Chief operating officer Chase Carey received strong support from the company's shareholders, garnering 91% of the votes cast. Former New York city school Chancellor Joel Klein collected 96% of the votes cast.

Natalie Bancroft, scion of the family that sold Dow Jones to News Corp, also received a huge vote against, as shareholders called for greater independence on the News Corp board.

Tanner said the votes against the Murdoch sons and Bancroft showed shareholders were serious about wanting more independence at News Corp. "The overwhelming influence of the Murdoch family is not acceptable anymore," she said.

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