Former Prime Minister Tony Blair has denied a “cosy” relationship with News Corporation chairman Rupert Murdoch.Blair told the Leveson Inquiry today he had never made a deal with the media mogul over policy issues but admitted he took the views of the Murdoch press into account when working out government strategy.He said: “There was no deal on issues to do with the media with Rupert Murdoch or indeed with anybody else, either express or implied, and to be fair, he never sought such a thing.”He denied changing any policy as a result of Murdoch's interference, after being asked about claims - made by former Labour press officer Lance Price - that several implied deals had been brokered between Number 10 and News Corporation.Last month, Murdoch told the inquiry he had never asked Blair or any other prime minister for a favour and accused the inquiry’s lead barrister, Robert Jay QC, of making “sinister inferences” over the relationship.He said: “I want to say, Mr Jay, that I, in ten years of his power, never asked Mr Blair for anything. Nor indeed did I receive any favours. If you want to check that, I think you should call him.”Blair said he decided not to carry out a review of cross-media ownership because it would have been a distraction to his government and not because he wanted to please Murdoch.He added: "I did not change our positions on core policy issues at all. On the other hand, managing these [media] forces was a major part of what you had to do and was difficult."I cannot recall conversation [with Murdoch] about media regulation per se. I mean he didn’t lobby me on media stuff. That’s not to say we weren’t aware of the positions their company had, because we were, but as I say we decided more often against than in favour but the bulk of conversation was about politics and Europe."Blair famously flew over to the Hayman Island in July 1995 to meet with Murdoch at his conference. Paul Keating, then Australian prime minister, was also present. Two years later the Sun and the News of the World switched support to the Labour Party, before the 1997 general election. According to Number 10 spin doctor Alastair Campbell, Keating said: "You can do deals with [Murdoch] without ever saying a deal is done".Blair was asked about three phone calls he had with Murdoch in the run-up to the Iraq war in March 2003. Campbell told the inquiry it was “nonsense” that Blair turned to Murdoch for support over the decision to invade the country.He said the phone conversations lasted no more than 45 minutes in total and provided the inquiry with a list of meetings and contact with other media organisations during the period.He added: “I would have been wanting to explain what we are doing. I think I had similar calls with the Observer and the Telegraph. I don't think there's anything particularly odd about that when you're facing such an issue.”He denied discussing press coverage with Murdoch. The proprietor told the inquiry he did not remember the calls and said News International’s position on the war had been declared in all titles before the calls took place.Blair said his working relationship with Murdoch changed after he left office in 2007. He became godfather to Murdoch's daughter in 2010.He added: "I would never have become a godfather to one of his children on the basis of my relationship in office. After I left I got to know him, and the relationship can be easier and better."Blair said there was “absolutely no truth” in a claim made by Labour MP Tom Watson when giving evidence to the inquiry last week.Watson said Rupert Murdoch had called Blair to call off the MP over the phone hacking scandal, being well known for speaking out against News International and sitting on the DCMS select committee examining hacking allegations made against the company.The MP said he was certain the 2009 phone call – relayed to him by Gordon Brown – had taken place, and that Downing Street insiders told him News International were trying to persuade senior politicians to tell him to hold back.Watson told the inquiry he took the call when on holiday in the Peak District, after noting both Murdoch and Blair have denied the call.He added: “Well, I can tell you the exact position I was standing in when I took the phone call, because the idea that Rupert Murdoch would call Tony Blair or Gordon Brown to phone me is not the sort of thing a backbench MP would forget too easily. It was within a wider conversation but I noted it.”Blair’s evidence was interrupted this afternoon when a protestor burst into the court behind Lord Justice Leveson, shouting the former prime minister should be arrested for war crimes. The protestor – David Lawley Wakelin from the Alternative Iraq Enquiry – was removed from the court and the judge promised there would be an investigation into how he gained access to court via the judge's private entrance. He was arrested by police but later released with no further action.The former prime minister said he believed Ofcom, the statutory media regulator, was the right organisation to oversee media policy but would not be able to replace the Press Complaints Commission as a press regulator.Blair confirmed he texted former News International CEO Rebekah Brooks following her resignation over phone hacking allegations last year. He said Brooks was important as editor of the Sun but there was "no doubt [Murdoch] was the key decision-maker" at News International.