Tensions at the heart of Rupert Murdoch's empire are threatening to explode into the open amid claims that the media mogul's children are turning on each other.

A biographer of Murdoch, Michael Wolff, claims the tycoon's daughter, Elisabeth, said her brother James had "f***ed the company".

Last week Elisabeth denied she had said something similar about the ousted News International chief executive, Rebekah Brooks. But Wolff insisted on Twitter: "She said, 'James and Rebekah f***ed the company."'

Wolff said Elisabeth made the remark at a book launch for political analyst Philip Gould hosted by her husband, Matthew Freud, and the editor of the Times, James Harding.

News Corp insiders questioned the truth of the claims, pointing out that Wolff has long been a critic of James Murdoch and has written about him disparagingly many times.

But Elisabeth is known to be dismayed by what is happening to her father's empire and it is understood there are tensions within the family.

Wolff, who stood by his claims, said: "What we are seeing is an enormous amount of frustration. James absolutely cannot survive. Whether or not he is legally culpable, he certainly mishandled this entire situation and has done for a long period of time."

The biographer suggested the world was witnessing the end of the Murdochs' dynastic ambitions.

"The Murdochs will be moved out of this company. James will go into some form of exile and Rupert will be put out to pasture and an outsider not named Murdoch will be put in charge."

Reliable sources have told the Observer the family have been having quarterly "summits" to discuss News Corp's long-term future.

"The family have been getting together every quarter to discuss News Corp's legacy and what it stands for; the last meeting they had was held in Australia," said the source.

"The fascinating thing now is that whatever the brand stood for earlier this year has been shot to pieces. News Corp is a world-class company in terms of how it is run and who it employs - it employs the brightest and the best throughout. Now it could be all over, if they find any evidence of hacking of 9/11 victims."

The concerns will add to the sense of crisis enveloping James Murdoch, who this week will be placed under pressure when a British parliamentary committee asks him to name those within News International whom he has publicly referred to as "wrongdoers".

In a highly unusual twist, the culture, media and sport select committee is contemplating placing Brooks and James and Rupert Murdoch under oath when they appear before it on Wednesday.