* Cameron testifies to media ethics inquiry on live TV
* Embarrassing message from Rebekah Brooks revealed
* Fallout from scandal at Murdoch paper damages Cameron
By Estelle Shirbon and Maria Golovnina
LONDON, June 14 (Reuters) - Rupert Murdoch's UK newspaper chief told David Cameron the night before a crucial political speech in 2009 that they were "professionally in this together", an inquiry revealed on Thursday, embarrassing the man who now governs Britain.
A text message to Cameron, then in opposition, from Rebekah Brooks, then the head of Murdoch's British newspapers, was read out to the prime minister on live television during a grilling about his ties to the tycoon's News Corp.
"I am so rooting for you tomorrow not just as a personal friend but because professionally we're definitely in this together. Speech of your life? Yes he Cam!" Brooks told Cameron in that message the night before his speech to the Conservative Party's annual conference.
Testifying under oath at the Leveson Inquiry into media ethics, Cameron said Brooks had merely meant that they had a common interest because her Sun newspaper had come out in support of the Conservative Party ahead of the 2010 election.
But the message makes excruciating reading for Cameron as "We're all in this together" was the Conservatives' campaign slogan for that election. It was meant to present the party as inclusive and caring, but the Brooks message instead reinforces the perception of a party in thrall to a powerful media clique.
"Yes he Cam" was the Sun's headline the day after he made the 2009 speech, suggesting Brooks had decided how the newspaper would react to the speech before it was made.
Brooks quit her News Corp job last year over phone-hacking by reporters on her watch and has since been charged with perverting the course of justice for allegedly hiding evidence.
Cameron ordered the Leveson Inquiry last year at a time when he was under pressure to crack down on Murdoch's papers because of the revelation that reporters at the News of the World tabloid had hacked into the phone of a murdered schoolgirl.
But if Cameron had hoped the inquiry might neuter the hacking scandal, it has done the opposite by producing evidence that has raised doubts about his own judgment and caused a rift with his Liberal Democrat coalition partners.
These problems have absorbed his time and energy at a time when he is also grappling with a recession, unpopular public spending cuts and the euro zone crisis. On Thursday, he spent five hours answering questions at Leveson.
The inquiry has shown generations of politicians from both of Britain's main parties, Labour and the Conservatives, have fawned over Murdoch and people close to him.
Cameron used to sign his frequent text messages to Brooks with an affectionate "LOL", which he thought stood for "lots of love", according to Brooks's own testimony at Leveson, but his two Labour predecessors courted her just as assiduously.
Tony Blair had several private dinners with her and sent her friendly text messages, while during Gordon Brown's time as prime minister, his wife Sarah invited Brooks to "sleepover parties" at Brown's official weekend retreat.
Cameron repeatedly pointed the finger at Labour during his testimony. He dismissed as a "conspiracy theory" an accusation by Brown that the Conservatives had discreetly championed Murdoch's interests in return for support from his newspapers.
"Not only was there no covert deal, there was no overt deal, and there wasn't 'nods and winks'," Cameron said, jabbing his hand forward to emphasise the point.
He rejected the suggestion that while there may have been no explicit deal, there was an unspoken and mutually beneficial agreement between his party and the Murdoch press.
"We do slightly get into sort of witchcraft trials. How do you possibly prove that you're innocent on that basis?" he said.
WEEKENDS IN THE COUNTRY
Cameron spoke fluently but looked tense at the inquiry. He frowned in concentration as he listened to questions from lawyer Robert Jay, in contrast to his usually relaxed manner.
But his efforts were undermined when Jay read out the 2009 text message from Brooks, which referred to a problem Cameron had at the time with another Murdoch paper and suggested that he and Brooks should discuss the matter "over country supper".
The phrase is embarrassing for Cameron, who used to socialise with Brooks and other rich and powerful people connected to Murdoch during weekends at their respective mansions in a picturesque corner of the Oxfordshire countryside.
Cameron squirmed as Jay pressed him to say how often he used to meet up with Brooks in the country.
"Not every weekend ... I'd have to check. I might be able to go back and check. But I don't think every weekend. I don't think most weekends. But it would depend."
For British voters, talk of meetings "over country supper" only reinforces Cameron's image as a man of wealth and privilege who has little understanding of ordinary people's lives - an image he has tried hard to counteract, downplaying his elite upbringing at Eton, an expensive boarding school.
"I had met him when he was editor of News of the World and I felt he was a very effective individual," Cameron said of Coulson. "That was my decision; I take full responsibility for it."
Cameron said he had received assurances that Coulson was not involved in phone hacking - but those proved hollow when Coulson was forced to resign from his senior government post last year after new revelations about widespread wrongdoing at his newspaper. Coulson has since been charged with perjury.
Coulson had resigned as News of the World editor in 2007 after his paper was found to have hacked into the voicemail messages of top aides to the royal family.
In written statements to the committee, Cameron said he would not have hired Coulson if he had known about the editor's involvement.
"He denied any knowledge of the hacking but said he took responsibility for what had happened on his watch," Cameron said in the statement. "I asked him specifically about his involvement."
Cameron's decision to bring Coulson into his inner circle has left the prime minister open to questions about his judgment in choosing a man who was already linked to the phone hacking scandal.
But he said Coulson had done a good job as communications chief and had performed his duties honorably.
"This has come back to haunt both him and me," Cameron said.
He admitted seeking the advice of Rebekah Brooks, another former tabloid editor facing criminal charges, before hiring Coulson.
Both Brooks and Coulson were senior editors in Rupert Murdoch's News International empire, and Brooks eventually became chief of Murdoch's UK newspapers before she, too, was forced out because of suspected links to the scandal.
Relations with Murdoch's media empire have been problematic for Cameron. The prime minister has faced criticism for the way his government handled Murdoch's bid to take full control of British Sky Broadcasting, a lucrative satellite broadcaster in which it already had a 39 percent stake.
The prime minister admitted Thursday that the press and politicians had gotten too close in Britain and needed to change their cozy relationship.
He admitted receiving an extremely supportive text from Brooks in 2009 just before a major party conference speech.
"Professionally we're definitely in this together," she wrote to Cameron, who was then still in opposition, before going on to urge him to give the best speech of his life.
Coulson has been charged with perjury in a case touched by the phone hacking scandal. Brooks was charged last month with three counts of conspiracy to pervert the course of justice - an offense that carries a maximum sentence of life imprisonment.
Cameron did concede that he had many social contacts with Brooks and her husband Charlie Brooks - a longtime friend of Cameron who also faces criminal charges - and also met with James Murdoch, Rupert's son, for drinks occasionally.
He said James Murdoch told him personally over drinks that The Sun newspaper would back his party in a general election, switching its support to Cameron's Conservatives after years of backing the rival Labour Party.
In his testimony, Cameron spelled out his media strategy when he became Conservative Party leader, saying he tried to "win back" newspapers that had traditionally backed his party but had been successfully wooed by former Prime Minister Tony Blair and the Labour Party.
He said he courted Murdoch's newspapers but never "traded" policy decisions in exchange for editorial support, adding that talk of a conspiracy with Murdoch's company was "nonsense."
Cameron said discussions with Rupert Murdoch usually focused on major international issues such as the war in Afghanistan rather than on commercial matters.
In this image from video, News Corp. chairman Rupert Murdoch appears at Lord Justice Brian Leveson's inquiry in London, Wednesday April 25, 2012 to answer questions under oath about how much he knew about phone hacking at the News of the World tabloid. Murdoch is being grilled on his relationship with British politicians at the country's media ethics inquiry, while a government minister is battling accusations he gave News Corp. privileged access in its bid to take over a major broadcaster. (AP Photo/Pool)
Rupert Murdoch, Wendi Deng
News Corp. chairman Rupert Murdoch and his wife Wendi Deng leave the High Court in London after giving evidence to the Leveson inquiry, Thursday, April 26, 2012. (AP Photo/Sang Tan)
In this image from video, former News International chairman James Murdoch appears at Lord Justice Brian Leveson's inquiry in London Tuesday April 24 2012 to answer questions under oath about how much he knew about phone hacking at the News of the World tabloid. Revelations that reporters had hacked into the phone of a teenage murder victim led James Murdoch's father Rupert to close the 168-year-old newspaper and triggered three police investigations as well as the judge-led inquiry into media practices. Rupert Murdoch, who is still chairman and chief executive of News International's parent company News Corp., will appear before the inquiry Wednesday. (AP Photo/Pool)
Andy Coulson, the former editor of the News of the World newspaper and former director of communications for Britain's Prime Minister David Cameron, leaves after appearing at the Leveson Inquiry at the High Court in central London, Thursday, May 10, 2012. Britain's phone hacking scandal came knocking on the door of Downing Street Thursday, as Cameron's former communications chief faced a grilling by a media ethics inquiry about his time as editor of a tabloid newspaper that practiced large-scale illegal eavesdropping. (AP Photo/Lefteris Pitarakis)
Rebekah Brooks, Charlie Brooks
FILE This Friday, May 11, 2012 file photo shows Rebekah Brooks, former chief executive of News International leaves the High Court in London after giving evidence to the Leveson Inquiry. Brooks said Tuesday May 15, 2012 she and her husband will face charges over Britain's tabloid phone hacking scandal. Brooks, 43, said Tuesday in a statement that she will be prosecuted over allegations of obstruction of justice.(AP Photo/Sang Tan)
Former British Prime Minister Tony Blair leaves the High Court in London Monday, May 28, 2012 after he gave evidence to the Leveson media inquiry. Blair testified Monday that he never challenged the influential British press because doing so would have plunged his administration in a drawn-out and politically damaging fight. The Leveson inquiry is Britain's media ethics probe that was set up in the wake of the scandal over phone hacking at Rupert Murdoch's News of the World, which was shut in July 2011,after it became clear that the tabloid had systematically broken the law. (AP Photo/Lefteris Pitarakis)
In this image from video, Britain's former Prime Minister Tony Blair, left, watches as a protester is restrained by officials after he burst in through a secure corridor behind inquiry leader Lord Justice Brian Leveson, right, during the inquiry into media ethics in London Monday, May 28, 2012. The intruder shouted, "This man should be arrested for war crimes!" before being removed by security. Blair testified to the Leveson inquiry into media ethics Monday he never challenged the influential British press because doing so would have plunged his administration in a drawn-out and politically damaging fight. (AP Photo/Pool)
British police officers escort an man to a waiting police van after he heckled former British Prime Minister Tony Blair as he was giving evidence at the Leveson at the Royal Courts of Justice in central London, Monday, May 28, 2012. Blair testified Monday that he never challenged the influential British press because doing so would have plunged his administration in a drawn-out and politically damaging fight. (AP Photo/Alastair Grant)
Police officers handcuff a man who threw an egg at the vehicle of former British Prime Minister Tony Blair as he was being driven away after appearing at the Leveson inquiry at the Royal Courts of Justice in London, Monday, May 28, 2012. Blair testified Monday that he never challenged the influential British press because doing so would have plunged his administration in a drawn-out and politically damaging fight. (AP Photo/Matt Dunham)
Adam Smith, Frederic Michel And Lord Brooke Give Evidence To The Leveson Inquiry
LONDON, ENGLAND - MAY 25: Department for Culture, Media and Sport Permanent Secretary Jonathan Stephens leaves The Royal Courts of Justice after giving evidence to The Leveson Inquiry on May 25, 2012 in London, England. This phase of the inquiry into the culture, practice and ethics of the press in the United Kingdom is looking at the relationship between the press and politicians. The inquiry, which may take a year or more to complete, comes in the wake of the phone hacking scandal that saw the closure of The News of The World newspaper in 2011. (Photo by Peter Macdiarmid/Getty Images)
Tom Watson, Alan Johnson And Lord Smith Give Evidence At The Leveson Inquiry
LONDON, ENGLAND - MAY 22: Former Home Sectretary Alan Johnson leaves The Royal Courts of Justice after giving evidence to The Leveson Inquiry on May 22, 2012 in London, England. This phase of the inquiry into the culture, practice and ethics of the press in the United Kingdom is looking at the relationship between the press and politicians. The inquiry, which may take a year or more to complete, comes in the wake of the phone hacking scandal that saw the closure of The News of The World newspaper in 2011. (Photo by Peter Macdiarmid/Getty Images)
Former Deputy PM Lord Prescott And Ex-Scotland Yard Officer Brian Paddick Appear Before The Leveson Inquiry
LONDON, ENGLAND - FEBRUARY 27: Former police commander Brian Paddick leaves after giving evidence at the Leveson inquiry on February 27, 2012 in London, England. The inquiry, which will take evidence from interested parties and may take a year or more to complete, comes in the wake of the phone hacking scandal that saw the closure of The News of The World newspaper. (Photo by Dan Kitwood/Getty Images)
Former Deputy PM Lord Prescott And Ex-Scotland Yard Officer Brian Paddick Appear Before The Leveson Inquiry
LONDON, ENGLAND - FEBRUARY 27: Former Deputy Prime Minister John Prescott arrives to give evidence at the Leveson inquiry on February 27, 2012 in London, England. The inquiry, which will take evidence from interested parties and may take a year or more to complete, comes in the wake of the phone hacking scandal that saw the closure of The News of The World newspaper. (Photo by Dan Kitwood/Getty Images)
Jim (L) and Margaret Watson (R)
Jim (L) and Margaret Watson (R) arrive at the Leveson inquiry at the the Royal Courts of Justice in London, on November 22, 2011. The phone hacking inquiry was set up by Prime Minister David Cameron in July amid public anger over the scandal when it emerged that the News of the World had accessed the voicemails of Milly Dowler, a murdered schoolgirl. AFP PHOTO / FACUNDO ARRIZABALAGA (Photo credit should read FACUNDO ARRIZABALAGA/AFP/Getty Images)
British television personality Steve Coogan (Top L) and Mary-Ellen Field (Below R) arrive at the Leveson inquiry at the the Royal Courts of Justice in London, on November 22, 2011. Mary Ellen-Field, a former aide to Australian supermodel Elle Macpherson, told an inquiry Tuesday she was fired after being falsely accused of leaking stories that were in fact obtained by British tabloid phone-hacking. AFP PHOTO / FACUNDO ARRIZABALAGA (Photo credit should read FACUNDO ARRIZABALAGA/AFP/Getty Images)
Britain's Home Secretary Theresa May arrives at the Leveson Inquiry into media standards at the High Court in London, Tuesday May 29 2012. The Leveson inquiry is Britain's media ethics probe that was set up in the wake of the scandal over phone hacking at Rupert Murdoch's News of the World newspaper, which was shut in July 2011, after it became clear that the tabloid had systematically broken the law. (AP Photo / Stefan Rousseau, PA) UNITED KINGDOM OUT - NO SALES - NO ARCHIVES
Fred Michel, a News Corporation lobbyist leaves after giving evidence to the Leveson inquiry, in central London, Thursday, May 24, 2012. A lobbyist for Rupert Murdoch's News Corp. says he had the impression that a government minister was aware of information being given by an aide about the company's bid to take over British Sky Broadcasting. Lobbyist Fred Michel told the Leveson Inquiry on Thursday that he knew he was not supposed to have direct discussions with Jeremy Hunt, the Secretary of State for Culture, Media and Sport, who was to decide whether the bid could proceed. (AP Photo)
Adam Smith, former special adviser to Culture Secretary Jeremy Hunt arrives at the Leveson inquiry, in central London, Thursday, May 24, 2012. Smith, who resigned last month after saying he went too far over his e-mail contacts relating to News Corporation's bid to take over BSkyB, was due to give evidence to the Leveson Inquiry into media standards. Hunt has rejected Labour party calls to quit over claims his relationship with Rupert Murdoch's company was too close. (AP Photo/Lefteris Pitarakis)
Former Director of Communications and Strategy for former Prime Minister Tony Blair, Alastair Campbell leaves after giving evidence to the Leveson Inquiry, at the Royal Courts of Justice, London, Monday May 14, 2012. (AP Photo/Tim Hales)