Chancellor denies Tories had pact with media giant

George Osborne. Photo / AP

Britain's Chancellor of the Exchequer George Osborne yesterday denied he had an overly cosy relationship with Rupert Murdoch's media empire despite dedicating a third of his meetings with newspaper executives to the group.

He also repeatedly insisted he had no recollection of discussing the mogul's failed bid for BSkyB with him or his lieutenants.

In an assured performance before the Leveson Inquiry, the Chancellor described last year's ill-fated attempt by News Corp to buy out the satellite broadcaster as a "political inconvenience". He suggested the Coalition Government could not resolve the issue without risking the ill-favour of powerful media interests.

Osborne derided as "complete nonsense" the suspicion that the Conservative high command had made a pact with the Murdoch empire before the 2010 general election to wave through the £7.5 billion ($150 billion) bid once in power in return for political support.

Under questioning from the inquiry barrister, Robert Jay, the Chancellor said a search of Conservative Party and Treasury records showed that a third of all his meetings with newspaper proprietors or editors had been with members of the Murdoch family or their executives - roughly matching News International's share of the UK newspaper market.

But Osborne was hazy on the content of some of the meetings he held with News International's managers, including Rebekah Brooks, the former chief executive with whom the Chancellor had a number of informal discussions before and after he reached No 11, including a lunch in a Swiss ski chalet in 2009 also attended by Rupert and James Murdoch and Prime Minister David Cameron.

The Chancellor insisted those conversations had centred around politics and economics and, before the 2010 election, never touched on the commercial aims of News Corp.

But on several occasions he was unable to recall the specific details of what had been discussed, including during a dinner with Brooks on December 13, 2010 which led to the News International chief executive writing in an email the next day he had expressed "total bafflement" at a decision by the media regulator Ofcom on the BSkyB bid.

Osborne said: "I certainly remember the dinner. I don't have any recollection of the conversation. I'm not doubting what Mrs Brooks says."

The Chancellor said he kept a scrupulous distance from the Whitehall process of deciding the BSkyB bid.

James Murdoch, the one-time heir-apparent of the Murdoch dynasty, was the only News Corp figure Osborne could directly recall discussing the BSkyB bid with.

During a conversation in November 2010, the Chancellor said Murdoch expressed frustration at the slow pace of the adjudication of the takeover but he told him he could not intervene.

Nonetheless, it is clear that Murdoch felt he could be candid with a senior member of the Government.

Recalling a conversation with Murdoch after a decision to preserve the BBC's licence fee, Osborne said: "I have a clear memory of him being angry about the decision."

The Chancellor confirmed he had been the main cheerleader for appointing former News of the World editor Andy Coulson in 2007 as director of communications for the Tory Party.

Osborne said he had met Coulson for a drink in 2007 and received an assurance there would be no further revelations from the phone-hacking scandal.

- Independent