British ministers backed Murdoch takeover: inquiry

British cabinet ministers worked behind the scenes to support James Murdoch's bid to take over a pay-TV company, a public inquiry heard on Thursday, adding weight to opposition criticism of the government's ties to powerful media barons.

The Leveson inquiry into relations between politicians and the press has shone a spotlight on the government's handling of News Corp's bid for BSkyB and whether Rupert Murdoch's media empire was able to promote its interests by influencing ministers.

Charges of perjury laid against Andy Coulson, Prime Minister David Cameron's communications chief from 2007 to 2011 and editor of the Murdoch-owned News of the World before that, have given added ammunition to critics of Cameron's judgment and ministers' links to media owners.

Text messages and emails put before the inquiry on Thursday showed how Culture Secretary Jeremy Hunt and finance minister George Osborne, close allies of Cameron, tried to reassure James Murdoch that they backed News Corp's $12 billion bid for the majority stake in BSkyB it did not already own.

"Congrats on Brussels, just Ofcom to go!" Hunt texted to Murdoch, referring to a decision by EU regulators in Brussels to approve the BSkyB takeover and to a decision yet to be taken by the British regulator, Ofcom.

Such messages add to a stream of correspondence that critics say shows how top politicians and media barons used each other to promote their own interests.

The Labour opposition has repeatedly called for Hunt to resign, accusing the ruling Conservatives of favoring News Corp to ensure sympathetic coverage in its British papers.

Cameron, however, reiterated his support for his culture minister after the hearing.

"Jeremy Hunt's evidence has shown that he acted properly," a spokesman for Cameron said. "He took independent advice at every turn, as well as a number of decisions which were against News Corporation's wishes."

The excesses of the press were exposed last summer when it was revealed that journalists at the News of the World tabloid had repeatedly broken the law by hacking people's phones to secure sensational stories.

The resulting scandal forced Rupert Murdoch to close the News of the World and pull the BSkyB takeover.

Vince Cable, the minister originally overseeing the BSkyB bid, had been removed after being secretly recorded saying he had "declared war" on Murdoch over the bid.

When News Corp complained about the government's conduct, Hunt contacted Osborne and officials in the prime minister's office to rally support for Murdoch.

Hours later Hunt, who had already made it clear that he supported the bid, was put in charge of ruling on the takeover.

HUNT SERIOUSLY WORRIED

"Cld we chat about Murdoch Sky bid? Am seriously worried we are going to screw this up," Hunt said in one text to Osborne, shortly after speaking to Murdoch.

Hunt also contacted Andy Coulson, Cameron's head of communications, to ask for his support.

Coulson had been the editor of the News of the World when much of the hacking took place and, though he has denied any knowledge of the crime, critics have said Cameron showed a shocking lack of judgment in making him his spokesman.

Coulson was charged with perjury on Wednesday on suspicion of lying under oath in a Scottish court in 2010 about the phone hacking. Coulson said in a statement he would vigorously contest the allegations should they ever result in a trial.

Coulson had previously insisted he had no involvement in the government's handling of the BSkyB deal. But Hunt texted him on one occasion saying "Could we chat about this? Am seriously worried Vince will do real damage to coalition with his comments."

Osborne replied to the pleas for help by saying that he hoped Hunt "liked the solution" - the decision to put Hunt in charge of the BSkyB bid.

Evidence submitted last month showed that a Hunt aide leaked sensitive information to News Corp during the regulatory process, leading to further calls for the culture minister to quit.

"I did think about my own position," Hunt told the inquiry. "But I had conducted the bid scrupulously fairly throughout every stage and I believed it was possible to demonstrate that, and I decided that it would not be appropriate for me to go."

Labour have accused the Conservatives, senior partners in a coalition with the Liberal Democrats, of wanting to approve the deal to ensure they continued to receive favorable treatment from Murdoch's newspapers in Britain.

"This has become a problem for Cameron and Osborne because they clearly knew and understood that the person to whom they were transferring responsibility was as biased as the person from whom they'd taken it away," Steven Barnett, professor of communications at Westminster University, said.

"I think they have some real explaining to do. They were so close and News Corp was so big, they were desperate to appease it."

Analysts have said Cameron may have to move Hunt to another job because he is no longer trusted by other companies in the media sector.

(Additional reporting by Tim Castle and Michael Holden; editing by Guy Faulconbridge and Myra MacDonald)

By Kate Holton and Philip Baillie

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