Hunt Under Fresh Pressure Over BSkyB Bid

Downing Street is facing fresh questions over the decision to appoint Culture Secretary Jeremy Hunt to oversee the controversial bid for BSkyB by Rupert Murdoch's News Corporation.

It comes after the Leveson Inquiry into media ethics revealed Mr Hunt made private representations to the Prime Minister supporting the bid before he was given responsibility for deciding the issue.

The Culture Secretary warned James Murdoch was "furious" about Business Secretary Vince Cable's handling of the matter in a briefing memo to David Cameron.

The dramatic disclosure came as Mr Hunt's special adviser, Adam Smith, gave evidence to the Leveson inquiry.

Mr Smith, who quit last month after admitting his contacts with News Corp lobbyist Fred Michel had got too close, insisted he had not been given any specific instructions by Mr Hunt or civil servants on his role in the quasi-judicial decision on BSkyB, which owns Sky News.

He said he had assumed he should be "managing relationships" with interested parties - but conceded that his only communications were with News Corp.

During his evidence, the inquiry was told about the memo Mr Smith's boss had sent to David Cameron on November 19, 2010.

It expressed concerns that referring the bid to Ofcom could leave the Government "in the wrong place on media policy".

Mr Hunt's briefing note to the Prime Minister was prepared barely a month before the Culture Secretary was put in charge of the BSkyB decision, after Vince Cable was caught on tape voicing his opposition to the bid and stating he was going to "declare war on Rupert Murdoch".

The memo reads: "James Murdoch is pretty furious at Vince's referral to Ofcom. He doesn't think he will get a fair hearing from Ofcom. I am privately concerned about this because News Corp are very litigious.

"Essentially what James Murdoch wants to do is to repeat what his father did with the move to Wapping and create the world's first multiplatform media operator available from paper to web to TV to iPhone to iPad.

"Isn't this what all media companies have to do ultimately?"

In his briefing memo, Mr Hunt went on to say: "The UK has the chance to lead the way on this as we did in the 80s with the Wapping move but if we block it our media sector will suffer for years.

"In the end I am sure sensible controls can be put into any merger to ensure there is plurality but I think it would be totally wrong to cave into the Mark Thompson/Channel 4/Guardian line that this represents a substantial change of control given that we all know Sky is controlled by News Corp now anyway."

The publication of the memo raises more awkward questions for Jeremy Hunt, but opposition politicians have also questioned the Prime Minister's judgement in giving his Culture Secretary oversight of the BSkyB bidding process.

Although that decision rested with the David Cameron, it had to be signed off by Whitehall's most senior civil servant, the Cabinet Secretary.

A Downing Street source has confirmed to Sky News that the then Cabinet Secretary Gus O'Donnell had no knowledge of the Jeremy Hunt memo at the time he sanctioned his appointment to oversee the News Corporation bid.

Downing Street played down the significance of the memo, saying in a statement that it was "entirely consistent with his public statements on the BSkyB bid prior to taking on the quasi-judicial role".

Earlier on Thursday, in his evidence to the Leveson Inquiry, News Corporation lobbyist Fred Michel insisted he believed Mr Hunt was aware of details being passed on to him about the BSkyB bid.

The public affairs specialist said he had the "sort of impression that some of the feedback I was being given had been discussed with the Secretary of State before I was given it".

Although he was not given legal advice on the nature of "quasi-judicial" ministerial decisions, Mr Michel said he knew he was not meant to have "direct discussions" with the Culture Secretary about the controversial issue.

The inquiry heard Mr Michel made 191 telephone calls and sent 158 emails and 799 texts to Mr Hunt's team between June 2010, when News Corp announced its BSkyB takeover bid, and July 2011, when it abandoned the plan amid outrage over the News Of The World phone-hacking scandal.