LONDON — Prime Minister David Cameron's handling of Britain's tabloid phone hacking scandal faces new criticism after a minister assigned to make an impartial decision on a takeover deal by Rupert Murdoch's News Corp. said his cozy ties to the tycoon's media empire were well known to the British leader.
Culture, Media and Sport Secretary Jeremy Hunt – the top minister in charge of London's 2012 Olympics – appeared Thursday before the country's press ethics inquiry amid questions over his conduct in deliberating on whether Murdoch's bid for a lucrative pay-TV provider should be approved.
Hunt said he regretted developing friendly links to Murdoch's son James, but he also shifted the focus back to Cameron, who has already been stung by his close ties to key suspects in Britain's tabloid phone hacking scandal. Cameron's former communications chief was arrested and charged Wednesday.
Cameron is expected to appear before the ethics panel in the coming weeks. Questions will likely focus on his handling of the hacking furor and his friendships with key players in the scandal.
Hunt was made responsible in December 2010 for a decision on whether News Corp. should be authorized to take full control of satellite broadcaster British Sky Broadcasting, in which it holds a 39 percent stake.
The decision was regarded as a sensitive task because of its potential to reduce the plurality of media ownership in Britain and strengthen Murdoch's grip on the industry.
Cameron gave Hunt the job after Britain's Business Secretary Vince Cable was taped by undercover reporters claiming he planned to "declare war on Murdoch," and removed from making the decision on the grounds of bias.
According to government convention, ministers are expected to rule on such issues with impartiality.
Critics insist Cameron was well aware that Hunt was supportive of the deal and likely to side with Murdoch.
"I was sympathetic on the bid; I hesitate on the word `supportive,'" Hunt told the inquiry.
He said he had told Cameron of his views, which were "widely known."
month before he was handed the task, Hunt had sent a letter to Cameron warning that blocking the deal would damage Britain's media industry.
The company's lobbyist Frederic Michel made 191 telephone calls and sent 158 emails and 799 texts to Hunt's office between June 2010, when News Corp. announced its bid to buy out other BSkyB shareholders, and July 2011, when the tabloid phone hacking scandal forced Murdoch to drop the plans.
The scandal erupted after revelations that reporters at Rupert Murdoch's News of the World tabloid routinely hacked voicemails. It has since spread to involve a range of other offenses and ensnared dozens of journalists, politicians, police officials and other public figures.
Just hours before he was given the task of adjudicating in the case, Hunt had himself sent James Murdoch a text congratulating him on the company's successes in winning initial approval for the takeover from European regulators.
On the same day, Hunt also texted Treasury chief George Osborne – a key government powerbroker – warning that Murdoch was seeking legal advice following Cable's critical comments. "I am seriously worried we are going to screw this up," Hunt told Osborne.
Osborne replied: "I hope you like the solution." Within hours, Hunt was appointed to rule on whether the News Corp. deal should go ahead.
The fallout from the phone hacking scandal – and persistent disclosures from Britain's lengthy inquiry into media malpractice – are threatening to dog Cameron's leadership, which is already suffering amid sluggish economic growth.
His ex-communications director Andy Coulson – a former News of The World editor – was charged with perjury late on Wednesday in connection with a case linked to tabloid wrongdoing. Coulson's lawyers said Thursday he would contest the allegations.
Cameron's friends Rebekah Brooks and her husband Charlie Brooks, who was at high school with the British leader, have both been charged with perverting the course of justice in relation to police inquiries into hacking.
At the hearing, Hunt acknowledged that in hindsight he had been wrong to develop such close ties with Murdoch's son James. They traded texts joking about the executive's hostility toward Britain's communications industry regulator and about his company's sponsorship of Britain's elite cyclists.
Despite his contacts with News Corp., Hunt said he did not show any bias. He said he believed his task was "to make sure that our democracy was safe," so his personal opinions were not relevant.
"I totally set aside all those sympathies," Hunt told the inquiry – which has previously heard testimony from Rupert Murdoch, James Murdoch and an adviser to Hunt, Adam Smith, who resigned when the scale of contacts between News Corp. and the minister's office were disclosed.
Critics suggest that close ties between News Corp. and British politicians were one of the key reasons that the company's newspapers – accused of malpractice including phone hacking and bribery of officials – were able to get away with wrongdoing for many years.
Hunt, whose ministry is responsible for Britain's media, conceded that his department was slow to grasp the scale of the phone hacking scandal, and its possible ramifications on the BSkyB bid. He said neither he, nor his aides, had anticipated the "volcano that was about to erupt."
After Hunt completed his testimony, Cameron's office confirmed that he would not face an additional inquiry by a government ombudsman into his conduct. Opposition lawmakers had demanded Hunt be investigated.
By DAVID STRINGER 05/31/12 02:33 PM ET