Osborne: BSkyB Bid Conspiracy Is 'Nonsense'

Claims of a "grand conspiracy" by the Conservative party to hand full control of BSkyB to News Corporation have been dismissed as "utter nonsense" by George Osborne.

The Chancellor, giving evidence to the Leveson inquiry into media ethics, was responding to suggestions made earlier by former prime minister Gordon Brown that a deal might have been struck.

Mr Brown said he was always careful to draw a line separating public and private interests.

"You can serve up dinner but you don't need to serve up BSkyB as part of dinner," he said. "You have got to have a clear dividing line."

He added: "We would never allow the public interest to subjugate to the commercial interest or the vested interest."

Mr Osborne rejected suggestions of a conspiracy over the business secretary, Vince Cable, being stripped of responsibility for the BSkyB bid after he was secretly taped saying that he had "declared war" on Mr Murdoch.

The Chancellor said: "You have to be a real fantasist to believe that come these events we had knowingly allowed Vince Cable to be secretly recorded, we knowingly told the Telegraph not to publish that information.

"That information then emerges in the middle of the afternoon and we then, all part of this cunning plan, put Mr Hunt in charge.

"It doesn't stack up."

Jeremy Hunt was given quasi-judicial oversight of the BSkyB bid in the wake of Dr Cable's controversial remarks.

Mr Osborne was also asked about a text exchange with Mr Hunt on December 21, 2010 - the day the business secretary was stripped of his responsibility for the bid.

It followed a text from Mr Hunt to Mr Osborne earlier that day, saying he wanted to chat about the BSkyB bid and was worried "we are going to screw this up".

The Chancellor texted in reply: "I hope you like our solution."

Mr Osborne told the inquiry that by that he meant giving Mr Hunt extra responsibilities for overseeing the bid.

He added: "My reference here is to the solution to that particular problem - Dr Cable's remarks."

Earlier, Gordon Brown told the inquiry he had not agreed to let the Sun newspaper run a front page story about his young son's medical condition.

He said that neither he, nor his wife Sarah had given the Sun permission to publish details of Fraser Brown's cystic fibrosis.

When she gave evidence to the inquiry at the Royal Courts of Justice, the former News International chief executive Rebekah Brooks denied the story had been obtained by hacking into medical records.

Instead, she said the information had come from a source connected to a charity for the condition.

But Mr Brown said he found that an unlikely explanation. At the time, only a few medical people knew his son had the condition.

"In 2006, The Sun claimed they had a story from a man in the street who happened to be the father of someone who suffered from cystic fibrosis. I never believed that could be correct."

The former prime minister also revealed he had recently received a letter from NHS Fife, apologising over the incident and indicating the Sun had been given the story by an employee at the health trust.

In a statement, NHS Fife said: "We now accept that it is highly likely that, sometime in 2006, a member of staff in NHS Fife spoke, without authorisation, about the medical condition of Mr Brown's son, Fraser.

"With the passage of time it has not been possible to identify all the circumstances.

"We believe, however, that there was no inappropriate access to the child's medical records.

"We are quite clear that conversations about patients are just as much a breach of confidentiality as looking into their medical records."

Mr Brown said he had tried - through the Press Complaints Commission - to get editors of major newspapers to agree on limits of coverage about his children.

"We didn't want our children to grow up thinking somehow they were minor celebrities," he said.

"We wanted our children to grow up as ordinary young kids."

Mr Brown was asked why his wife had remained friends with Mrs Brooks after the story about Fraser was published in The Sun.

"Sarah is one of the most forgiving people I know," he said. "We had to get on with the job of doing what is expected."

Gordon Brown also denied he ever threatened to "declare war" on Rupert Murdoch, as the newspaper boss had claimed in his evidence before the inquiry.

Mr Murdoch told the hearing in April that Gordon Brown was "angry and unbalanced" in the phone exchange after The Sun switched support from Labour to the Conservatives before the last election.

Mr Brown told Lord Justice Leveson "there was no conversation. No such conversation took place" between him and the media tycoon on September 30, 2009, as Rupert Murdoch had alleged.

He also insisted he did not lose the support of The Sun because, he said, the newspaper had never backed him in the first place.

"The first thing The Sun did was try to ruin my first party conference by launching a huge campaign about how we were selling Britain down the river and demanding not only a European referendum but demanding I support it."

The newspaper announced it was switching its support to the Conservatives during Labour's party conference in September 2009.