The Leveson Inquiry

Former News of the World reporter Mazher Mahmood commissioned a private investigator to stalk Tom Watson at a Labour Party conference, the MP alleged.

Watson told the Leveson Inquiry that Mahmood – known as the ‘Fake Sheikh – hired Derek Webb to trail him in 2009, to establish whether he was having an affair.

He said emails between Mahmood and news editors Ian Edmondson and James Mellor described information he says is untrue. The MP - who sat on the Culture, Media and Sport select committee examining phone hacking at the News of the World - claims News International had a vendetta against him after he spoke out against the company.

Watson told the inquiry he had no evidence there was a “craven understanding” between politicians and senior executives at News International but has been encouraging colleagues to come forward with stories of alleged blackmail and intimidation by the company.

Lord Justice Leveson told the MP it was clear he did not have an entirely "dispassionate" view on the issues he was considering, and asked if he could urge other MPs to speak out about blackmail and intimidation by any newspaper group, not just News International.

Asked why it had take so long for politicians to “wake up” to hacking, Watson said some had “closed their minds” to the allegations.

He said: “I think they closed their minds to the potential for a major scandal at one of their key outlets for their message, and I think the personal relations between politicians and people at the company were too fibrous and close so that they couldn’t divorce their objective thinking. And I think they were frightened.”

Watson said Labour MP Martin Salter was subjected to several invasions of privacy after he opposed the Sarah’s Law campaign run in the News of the World, going on to say MPs feared ridicule or humiliation in the press in relation to their private lives or professional mistakes.

He added: “There was a sense that there was a mystique about the News International stable, that they had unique access to Downing Street and for a minister that was important, and the way you were portrayed in the News International papers was important and they factored that into their thinking.”

He said Gordon Brown called him – some time after the 2010 general election – to say Rupert Murdoch had phoned Tony Blair to “call him off”.

Both Blair and Murdoch have denied this, but Watson said he remembered the conversation clearly.

He told the inquiry: “I can tell you the exact position I was standing 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 back bench MP would forget too easily.”

The MP denied leaking information to the Guardian or former News of the World journalist Ian Kirby but admitted speaking to Guardian reporter Nick Davies, who broke the Milly Dowler phone hacking story last year.

Rhodri Davies QC, acting for News International, said there was no evidence any members of the select committee other than Watson had been placed under surveillance by the News of the World.

Lord Mandelson has denied a “Faustian pact” between the Labour government and Rupert Murdoch.

The politician, who held several senior positions under Tony Blair and Gordon Brown, told the Leveson Inquiry the opposite was often true.

In his written statement to the inquiry, he said: “I reject the view that, under either Mr Blair or Mr Brown, some sort of Faustian pact was forged between the government and Rupert Murdoch involving commercial concessions to him in return for support from his newspapers.”

He told the inquiry during his oral evidence that Labour welcomed the support of Murdoch’s papers but did not make concessions to his commercial interests. He went on to criticise David Cameron for making a “deliberate" attack on broadcast regulator Ofcom “which News International wanted to see swept off the board”.

Mandelson said he declined a dinner invitation from Murdoch in 2010 but agreed to meet him to discuss claims the Labour government had “declared war” on News Corporation.

He added: “I don't think there's any great secret that the government and the Prime Minister were unhappy that after all those years of support of the Sun, the Sun was now gunning for us. [Murdoch] was quite agitated, as he put it, that the government had declared war on his company.

“It's not something I would have sought or wished for but there we are. They had decided to withdraw their support.”

The former business secretary warned journalists and politicians from becoming too close.

He told the inquiry: “You can be friendly with journalists but journalists are never your friends. I think journalists would probably say the same about politicians. I could recall journalists who became friends but that was rare."

The problem arises when journalists who expect exclusivity are disappointed, and politicians are disappointed when they expect favourable treatment. That's why I talk about the boundaries and when you overstep them.”

Mandelson said police had told him the Daily Mirror commissioned private investigator Jonathan Rees – of Southern Investigations – to obtain information on him. His bank account had been targeted, along with details about his brother and surveillance of his elderly mother. Piers Morgan was editor of the newspaper in 1999, when four invoices in relation to Lord Mandelson were sent to the newspaper.

Mandelson described Rebekah Brooks as being “very free with her views”. When asked about his dealings with the former News International chief executive, he said it was “partly true” that the editorial view of the Sun represented Brooks’ view and that of her proprietor. He described her as having “persistence, charm [and] manipulative skills”.

News International executive Les Hinton “didn't seem to enjoy the fun of the chase like Rebekah did” but frequently lobbied the Labour Party, he said. Mandelson admitted to personal friendship with Elisabeth Murdoch and her husband Matthew Freud, who he described as “a connector rather than a conduit”.

The politician criticised Brooks and James Murdoch over the decision for the Sun to support the Conservative Party during the 2010 election.

He told the inquiry: “To turn the Sun into some Tory fanzine on the flick of a coin between Rebekah Brooks and James Murdoch, ‘Shall we do it today? Shall we wait another day?', it was insulting for Sun readers... I thought they were making fools of themselves.”

He said the “great friendship” between Gordon Brown and Daily Mail editor Paul Dacre was met with “astonishment” and the Mail and Mail on Sunday often avoided criticising him despite not agreeing with policy decisions.

Mandelson later accused former Met officer John Yates of leaking information about the cash-for-honours investigation to the press, saying he heard first-hand from journalists that the former assistant commissioner personally called them.

When questioned by Neil Garnham QC, representing the Met, Mandelson said he would not have made the comments if there were “no foundation”.

He added: “[Journalists] were as surprised as anyone to find themselves on the phone to AC Yates.”

Mandelson provided the inquiry with a letter sent to him by Yates – described as “bullying" – attacking him over the claims.

He criticised Culture Secretary Jeremy Hunt for not stopping “inappropriate contact” between his special advisor Adam Smith and News Corp lobbyist Frederic Michel.

He added: “What on earth was a temporary civil servant, a special adviser to a secretary of state, doing texting like that and exchanging messages and information with a corporate lobbyist? If they'd have been in the Department for Business they would have been taken out and shot, in fact they would not have got to that stage.”

Mandelson advised the inquiry to “approach some of the communications that took place with scepticism” after admitting Michel used to work for the think-tank he chairs.

He added: “I don't want to mislead you, but I am in a difficult position. All I would say is that he was perhaps better at networking than he was dealing with policies. He was better over people than he was on policies. Perhaps he might have been better suited to public relations than lobbying.”

Mandelson closed his evidence by recommending independent regulation of the press with powers to sanction and fine publications.

He said: “If newspapers spent more time looking into corporate misbehaviour and general wrongdoing rather than celebrity tittle-tattle and gossip the country would be a lot better off, their circulation would go up and they would be more profitable.”

Tessa Jowell has denied failing to help police with phone hacking prosecutions.

The former Culture Secretary said police informed her voicemail messages had been illegally intercepted in 2006, when she was on holiday with family and friends, and her “offers of further help were declined”.

Previously the inquiry heard Jowell had resisted helping officers with prosecuting private investigator Glenn Mulcaire and News of the World royal editor Clive Goodman. In February, DCS Keith Surtees, an investigating officer on Operation Caryatid, said in a witness statement: “One of these victims was Tessa Jowell. All of the potential victims declined to assist us with the prosecution.”

Jowell told the inquiry: “I was a Secretary of State and a privy councillor. It would have been absolutely incumbent on me, were I asked to cooperate with an inquiry, to agree to. My principal private secretary, who is a civil servant, confirmed my willingness to help.”

“I was deeply shocked when I read Keith Surtees’ evidence, because it is completely untrue. And I completely understand that his memory may be faulty and I think that the way the transcript reads seems to imply a lack of accuracy in his recollection, but I would want the inquiry to be absolutely clear that had I been asked at that time to provide a witness statement, I would have provided it."

Pressed by Neil Garnham QC, acting for the Metropolitan Police, the MP said she had been shocked and upset by the information but had asked what she could do to help with the investigation.

Jowell said she did not realise her phone had been hacked before the police contacted her, but admitted she “adopted a permanent stance as if you are being followed, as if someone is watching or listening” after a series of intimate stories appeared in the press. She said the Daily Mail, the Evening Standard and the Sunday Times were among papers who printed these articles and promised to submit examples to the inquiry.

She added: “It was as if my closest friends had simply rung up the newspapers and said this is what she is thinking.”

Jowell was originally told her voicemail had been accessed on ”28 or 29 occasions” but said she has discovered it was a higher figure.

Jowell, Culture Secretary from 2001 to 2007, said Tony Blair had assured her no deal had been made with Rupert Murdoch over cross-media ownership. Jowell and Patricia Hewitt, then Secretary of State for Trade and Industry, oversaw the Communications Act, which affected policy on media plurality and regulation.

She told the inquiry: "The prime minister's instincts were more deregulatory than mine, he pushed me further than I would have gone myself in exploring deregulatory options.”

Lord Puttnam, head of a joint committee examining the original Bill, pushed for a public interest test to ensure takeover bids did not affect media plurality. Jowell dismissed Puttnam’s claims, made in 2005, that he had been misled over newspapers’ lobbying of the government.

Asked about Operation Motorman – investigating the illegal obtaining of data by private investigator Steve Whittamore for several national newspapers – Jowell said her office was not responsible for the Data Protection Act and any attempt to oversee the Press Complaints Commission would have been seen as government interference in the press.

She said: “The PCC is independently funded and self-regulatory. Had my department at that time established a unit who were concerned with overseeing the behaviour of the press would immediately have been seen as a step to undermine self-regulation.”

The MP was asked about her friendships with Guardian editor Alan Rusbridger and the couple Matthew Freud and Elisabeth Murdoch. She said social events, including those held by Freud, “work on the basis that all parties know the rules, accept the rules and observe the rules in practice” but denied extending favours to friends in the media.

Rupert Murdoch’s takeover of Times Newspapers was a “seminal event” in collusion between the press and politicians, the Leveson Inquiry has heard.

Sir Harold Evans, editor of the Times from 1981 to 1982, was part of a management buyout group who wanted to take over the Sunday Times at the time.

Evans said the takeover was relevant to the inquiry because it shows "the manifestations of the same culture of too close a connection between one powerful media group and politicians".

He said no one knew Murdoch had a secret lunch in 1981 with then prime minister Margaret Thatcher and explained it was thought the bid would be referred to the Monopolies and Mergers Commission (MMC).

He told Lord Justice Leveson: “My Lord, if I might say so, the seminal event was 30 years ago. [Current problems] all flowed from the excessive concentration of power in a single media corporation.”

Evans, who edited the Sunday Times for 14 years, said he was “horrified” that the takeover – which he called the most important in British press history – had not been referred to the MMC by trade secretary John Biffen. Evans said journalists at the Times believed the bid would be blocked.

He added: “I was told by someone I knew that Mrs Thatcher had determined [the bid] must go to Mr Murdoch because she valued his support. In this belief I was supportive of Mr Hugh Stephenson at the Times, who had it from a friend in the Cabinet Office that Mrs Thatcher’s real debt of gratitude was the crucial factor in doing this.”

The former editor said his relationship with Murdoch had started well, describing him as an “electric presence”. But by 1982 Evans referred to him as "evil incarnate".

He said: "He had his heart removed long ago along with moral faculties and human sensibilities”.

Evans described almost coming to blows with Murdoch over economic policy, after he invited the proprietor to his house for dinner. Evans said Murdoch had gone through the business news of the paper – “gouging through” the pages with a pen – following another dinner where the editor was criticised by Murdoch’s friends.

He resigned from the Times in 1982 over editorial differences with Murdoch.

Evans said press regulation could include an independent ombudsman with the power to summon editors and journalists, and issue sanctions. He added the current Press Complaints Commission does “not even have the power to frighten a goose”.

Meetings between journalists and politicians can be “a potential conspiracy against the public”, the Daily Telegraph political commentator has warned.

Peter Oborne told the Leveson Inquiry today meetings between ministers and newspaper moguls can be even more dangerous.

In a written statement, he said: “Meetings between journalists and politicians should be viewed as a potential conspiracy against the public, even more so meetings between ministers and proprietors.”

Oborne said under New Labour, political reporting became a matter of private deals with the media, “invisible to voters”. He added it was a “great pity” the House of Commons no longer enforces a “system of social apartheid between reporters and politicians”.

He said: “People who tried to report objectively and fairly were frozen out, were bullied, victimised, not given any access to information, and people who were part of the inner circle and developed social connections – very often – with the powerful political people, were favoured. And of course there’s a price for that because it was very hard to be an independent observer, keep your integrity in those circumstances."

He later added: "Something's gone wrong with the way politics is reported. If you go to the House of Commons chamber, it is quite often empty. Brilliant speeches are made and unreported but some sort of furtive lunch may end up as a bitchy piece by a colleague."

Oborne, a former columnist for the Spectator, went on to say the press and politicians became an “elite category which you could observe manufacturing a particular kind of acceptable public truth”.

He called the failure of newspapers to report phone hacking “culpable” but said it was because titles did not want to embarrass each other.

He added: “I think anybody who was to suggest that the reason why the rival newspaper groups were unwilling to report phone hacking at the News International titles because they themselves [had done it] I think would need to provide evidence, a) that those rival newspaper groups practiced phone hacking - I haven’t seen any – and b) that that was the motive even if they did. I think you have to be very careful about that motive.”

He said there was a sense News International was “above the law” because of a lack of interest “at Cabinet level” in alleged criminality at the company. Ministers, including former Culture Secretary Tessa Jowell, were informed their phones had been hacked in 2006 but took no action, implying a “government protection", he said.

He added: “There is some reason to believe that the Murdoch connection with government contributed to the general News International sense of impunity.”

The journalist told Lord Justice Leveson politicians had created a “myth” around the importance of press coverage, and only a “pathetic” Prime Minister would sack a colleague over negative reporting. He said most resignations had “serious reasons” behind them. He was surprised the House of Commons did not take action against ministers who leaked announcements to the media, saying a great deal of George Osborne’s budget seemed to have been leaked to the press before it was announced.

Asked about the industry, Oborne said the police had failed to enforce existing laws and “proper systems” within newspapers had collapsed.

He added: “It seems to me there was a gross failure by the Met police to investigate clear evidence of criminal behaviour.”

He advocated a system where newspapers have a standards committee – including the editor, managaing editor, legal head and “old hand” journalist – to vet and record any proposals by reporters to break the law in the public interest.

Labour minister Jack Straw has claimed Rupert Murdoch "seems to enjoy playing with political leaders".

The MP, who held several senior positions under the Labour government, said the proprietor is interested in power and using political connections to help open doors on media policy.

During his evidence to the Leveson Inquiry today, Straw admitted he had “no more than a paragraph-worth of conversation" with the News Corporation founder, but formed the view Murdoch was “interested in power for its own sake”. Asked whether support was ever offered to Labour, Straw said Murdoch would back the winning party “in return for what he thought he could get out of it”.

He added: “I don’t mean a deal, because I’ve seen no evidence of a deal.”

Straw said he was aware Tony Blair had three phone conversations with Murdoch leading up to the Iraq war in 2003 but denied they had any influence over cabinet discussions, which he said would be “disgusting were it true”.

He added: “When Mr Blair came into power we all took the view that it was best to get the papers on our side, without compromising ourselves.”

He admitted the Blair government was too close to some journalists from being in opposition, and carried the relationship on after the 1997 election. He claimed opposition spokespeople often built up “very, very close, sometimes incestuous” relationships with political correspondents. He later told the inquiry he was "furious" after discovering a leak of the Lawrence report from Number 10, and had launched internal enquires. The individual responsible did not face action but later left Downing Street.

Robert Jay QC, inquiry counsel, asked Straw about his contact with Rebekah Brooks, after his witness statement revealed the pair “made arrangements” to sit together on a train from Oxfordshire to London.

He told the inquiry: “We would talk about what was in the papers. We'd gossip about personalities, and that sort of thing. We weren't nattering the whole journey.”

The journeys stopped in 2009 when Brooks was made chief executive of News International and changed her travel arrangements. Straw later said Brooks had “persistently lobbied” him over the News of the World’s 'Sarah’s Law' campaign in 2000. Last week the former executive told the inquiry the campaign was launched on behalf of the paper’s readers.

In reference to the recent resignation of Jeremy Hunt’s special advisor, Adam Smith, over contact with News Corporation, Straw claimed he would have been aware if his own had “acted inappropriately”.

He told the inquiry: “I knew what they were doing and I knew in real time what they were doing.

“If there had been a moment where they had acted inappropriately then somebody else in this very open environment, I mean ring of informality but very open environment itself, would have told me. The Private Secretary, the Permanent Secretary, a press officer - they just would have found out immediately."

On privacy, Straw said Parliament should “take this job on now” and introduce legislation instead of relying on judge’s decisions in court under the Human Rights Act, to show people "that they do have the right to have their privacy protected". He said the press were “desperate” to uncover the new identities of Robert Thompson and Jon Venables, after they were released from prison, for the murder of Jamie Bulger, in 2001.

He added: “If the identities of these people had been disclosed, they would have been at very serious risk of physical danger, injury, certainly, worse possible and yet some of the papers simply weren’t willing to think about that... I stuck to my guns on that.”

The former Justice Minster said he regretted the penalty for breaching the Data Protection Act was “too low” and told the inquiry how Brooks, Daily Mail editor Paul Dacre and Telegraph Media Group executive Murdoch MacLennan had lobbied him over the introduction of jail terms for breaches.

He said he dropped that part of the Data Protection Bill to pass it quickly as other policy areas, including prisons, were affected, but said the amendment to section 55 of the Act – concerning the obtaining and selling of data – should now have been introduced.

Asked about conditional fee agreements, which he also discussed with Brooks and Dacre, Straw said he was faced by contrasting evidence from local and national press, and law firms. Lord Justice Leveson pointed out most people were unable to afford libel and privacy actions against the press before CFAs to which Straw said he had seen them being misused, leaving small local papers with large legal bills.

Straw accused journalists of being “quixotic” and lacked the understanding of what it feels like to make decisions, adding “there is a degree of voyeurism about the British press”.

He advocated press regulation with a statutory backing – saying self-regulation allowed editors to be “judge and jury in their own courts” – but admitted there will be a "concerted effort" by some newspapers to oppose plans.

He assured Leveson: “There will be that continuing momentum for change and some of us are going to do our best to ensure that it takes place.”

A former chairman of the Press Complaints Commission has told the Leveson Inquiry the body “was never a regulator”.

Lord Wakeham, who headed the body from 1995 to 2001, said today his job was to try and raise press standards.

He told the inquiry the industry wanted a chairman “with a bit of clout” and described threatening editors by claiming he would tell the Prime Minister they were “impossible”.

He urged Lord Justice Leveson to rule out statutory regulation and said Parliament would strengthen restraints on the press “whenever they find an opportunity”.

The judge replied: “There’s no question of my suggesting statutory control of the press at all... there isn’t a chance of me recommending that.

“The former chairman said Northern and Shell’s decision to quit the PCC is “serious” and advocated Lord Hunt’s proposal for a contract requiring proprietors to sign up to industry regulation.

Wakeham said changes made to the PCC code following the death of Princess Diana were “right at the time and a significant improvement”, telling the inquiry “you have to pick the moment when the press was in the mood” to accept a tougher code.

He added: “I think [the changes] did make a difference. The crux of what I tried to do was to say that the editor is responsible for what appears in his newspaper.""The respect of the PCC has gone down in recent years because they haven't had the high profile of complaints that we had... The system in my day was it was not right to do anything about it if the person didn't complain, and there was good reason for that.”

He added: “The Press Complaints Commission, in my view, was the best way of protecting the public and I didn’t want to see it destroyed in the way that it more or less has been in the last few years.”

He said he was concerned the Human Rights Act had introduced a privacy law only available to the “rich and famous” in court, meaning the PCC had become an “on the cheap” way of resolving complaints which lowered standards. Wakeham, who chaired a subcommittee on the second Calcutt report, said he told then prime minister John Major introducing a privacy law would be difficult.

He added: “It would not have been very easy to define the public interest, secondly I did not think that it would be at all easy to get the legislation through Parliament, thirdly I did not think it would protect the people who read newspapers. The privacy law this would have created would have been very difficult for public unless they are rich and not quite as bad for newspapers as they pretend.”

Wakeham told the inquiry how he called Rupert Murdoch after the News of the World printed pictures of Lord Spencer’s wife in a nursing home – when Piers Morgan edited the paper – to send a message to the press the PCC “weren’t to be trifled with”.

He added: “It was a very serious and I wanted to get the message over... proprietors had a responsibility for their editors in behaving in a reasonable and proper way... I thought it was a good example to rub the point home.”

He described calling Buckingham Palace after a newspaper published topless photographs of a member of the royal family, urging them to complain to the PCC before it was mentioned in Parliament. They were reluctant, but agreed after Wakeham said he would issue a statement on the matter.

He added: “Within 48 hours the editor of the paper had apologised profusely and so on for a serious error of judgment and the matter was dealt with. It would not have been dealt with if I hadn’t waded in to do it.”

The “carelessness” between the press and politicians became “excessive”, the Sky News political editor has said today.

Giving evidence to the Leveson Inquiry, Adam Boulton said journalists should avoid becoming too friendly with politicians if they interview them on a regular basis.

He later added: “I think one of the things about the media is seeking access and I think if you’re pushing at an open door its quite difficult to know when you should pull back... I think you can be blamed with hindsight, if a lot of people think it looks wrong.”

Boulton told David Barr, junior inquiry counsel, it was “perfectly understandable" for politicians to draw journalists’ attention to certain issues and said he doubted politicians transformed their behavior to garner press support. He admitted some courted newspapers for backing and said proprietors and journalists had to judge their relationships for themselves. He agreed that Tony Blair and David Cameron “may have” got too close to Rupert Murdoch.

The journalist expressed surprise that David Cameron and Ed Miliband had attended the News Corp summer party last year “to pay court”.

He added: “I see nothing wrong in holding a party or inviting people to it. I was a little surprised that they felt the need to turn up, I’ll put it like that. And people looking from the outside would draw their own conclusions.”

He went on to say he thought an infamous “pyjama party” attended by Murdoch’s wife Wendi Deng, Sarah Brown and Rebekah Brooks was inappropriate.

He said: “I just thought ‘this is completely bonkers that this sort of intimacy is being indulged in by the Prime Minister’s wife and a senior proprietor’s wife’, and I thought at the time ‘it will all end in tears’.”

Asked about the News Corp BSkyB takeover bid, Boulton said he made it clear Sky was independent and regulated by Ofcom, and he had only had three conversations with proprietor Rupert Murdoch in his 23 years at the broadcaster.

He also criticised the government under Blair and Gordon Brown for not feeling the “obligation to tell the truth at all times”.

Lord Justice Leveson has warned politicians not to disclose information on the contact between Jeremy Hunt and News Corporation before evidence has been heard before his inquiry.

Speaking today, the judge said ministers discussing evidence in the House of Commons before the Culture Secretary and others have appeared before him could “undermine the fairness of the procedure".

He also said he would not adjudicate on whether the House had been mislead by Hunt, saying it was up to the Prime Minister “to take any action he wishes in connection with the conduct of one of his ministers.”

Emails between News Corp’s Frederic Michel and Hunt’s office, submitted to the inquiry, imply Hunt may have had inappropriate contact with Rupert Murdoch’s company over the BSkyB bid.

Leveson said he would call Michel and Adam Smith, Hunt’s special advisor, before the end of May. It is likely Hunt will also appear this month.

He noted the emails had been the subject of “immediate comment” in Parliament and the media, and said if evidence is disclosed early he would consider not questioning Hunt, Michel and Smith over the bid.

He said: “If the evidence were to have been forced into the public domain and be the subject of argument and debate in advance of the witness giving evidence so that minds are potentially made up and conclusions reached, my immediate reaction would be that I would consider it unfair to subject the witnesses to further questions before this inquiry.”

“I would hope sufficient respect for my process will allow it to proceed without interruption and without effectively rendering the order which I have made entirely academic.”

Yesterday Harriet Harman MP asked whether Hunt was still accountable and subject to questions from other MPs while waiting to appear at the inquiry.

Speaker Bercow replied: “As a matter of general principle, I should make it clear that the accountability of a minister to this House is not diluted or suspended by a minister's engagement with inquiries or other proceedings outside of this House. When Parliamentary Questions to ministers are tabled, those questions should receive substantive and timely answers.”

Leveson told the inquiry he was not taking sides but it was important to hear every side of the story before drawing conclusions.

He added: “I am approaching my task in a politically neutral fashion and intend to ensure that the principles of fairness which I have sought to maintain throughout apply equally to this module. I will be considering the way in which politicians of all parties have engaged with the press.”"I hope that allowing the inquiry to proceed as it plans will not amount to a serious inconvenience either to Parliament or to the political process generally. On the contrary, I hope that the process which I have put in place is well placed to assist both."

Alastair Campbell returned to the Leveson Inquiry today to deny an “express deal” between Tony Blair and Rupert Murdoch.

The former Labour spin doctor said Murdoch turned his newspaper’s support to the party after it became obvious Blair would win the 1997 general election. He admitted the Sun was seen as a "significant player" in the media, but said the paper backed the winning party rather than deciding the outcome of the election.

He said: “There was a sense of a hierarchy which papers were more important than others and I think the Sun, I wouldn’t call it iconic but I think it was a significant player and I think within the media marketplace, Rupert Murdoch then had, probably within the press, a greater share and greater power than perhaps he does now because of all the change that have happened with television, internet social media and so forth.”

He added: “My point is I never was witness to and don’t believe that there was ever a discussion and said ‘now Tony, if you do this and this and this my papers will back you’ – it just never happened.”

He said Blair “didn’t particularly like” having to meet with Murdoch, but said they would have been “foolish” not to engage with his newspapers – claiming this was the reason behind Blair writing an article in the Sun on the Euro, in 1997.

Campbell said Blair assured Tessa Jowell policy deals would not be made with proprietors, when the minister took over as culture secretary following the election. He also played down a series of phone calls between Murdoch and the Prime Minister in the lead-up to the Iraq war.

He told the inquiry: “"I wouldn't overstate the significance of a couple of phone calls with Rupert Murdoch... Even at times like this he would have spoken to all sorts of people. No, I wouldn't read too much into it, to be absolutely frank."

Of the six phone calls recorded by the Cabinet Office between Murdoch and Blair from 2002 to 2005, three took place in March 2003, shortly before the government’s decision to go to war was announced.

Campbell added: “In terms of the decision that was being taken and the policy that was being pursued, it was hugely unpopular. We knew that... it was a pretty difficulty media landscape... I was if anything, surprised at how few phone calls there had been when the cabinet office produced this record.

“It doesn’t strike me as that odd, not least because by then I think it’s fair to say Tony Blair had very few strong supporters in the media left."

Campbell praised the Hacked Off campaign, along with non-profit organisations the Media Standards Trust and Full Fact for representing genuine concerns about the media, and said a future regulatory framework should allow for the investigation of trends as well as individual complaints.

He told Lord Justice Leveson he believed education secretary Michael Gove recently spoke out against the inquiry as part of a wider political strategy to retain the support of the mainstream press. He claimed party leaders David Cameron and Nick Clegg, along with Ed Miliband, were being “disproportionately whacked” in the media for setting up the inquiry.

He added: “I don’t think that David Cameron particularly wants to have to deal with this, I don’t think he wanted to set up the inquiry. He had to do it in the end.

“I think it would be very difficult for him not to go along with whatever recommendations or at least a very large part of the recommendations the inquiry produces but I don’t think there is much of an appetite.”

Campbell denied reports he bullied reporters who wrote unflattering stories about the Labour government but admitted he held some journalists in “complete and total contempt”.

He added: “I had a job to do. My job was to brief the press on behalf on the Prime Minister and to advise the Prime Minister and other ministers, and I did that job in an incredibly exposed place... I dealt with thousands of stories, I dealt with thousands of briefings and I would defend the accuracy and the honesty of those against any journalist any day of the week.”

David Cameron was “too close” to senior media figures, a former cabinet secretary has told the Leveson Inquiry.

Lord O’Donnell said he agreed with comments made by David Cameron on his relationships with editors and proprietors. In a BBC interview earlier this year, the prime minister admitted he had become too close to newspaper proprietors and executives, including those at News International.

O’Donnell, who was also press secretary to John Major, told the inquiry: “I think the Prime Minister himself, the current Prime Minister, has said that he felt his relationships had got too close, and I agree with him.”

Last week Rebekah Brooks, former chief executive of News International, revealed Cameron had commiserated her after her resignation from the company last year and signed text messages "lol" - meaning "lots of love".

O'Donnell said politicians should be prepared to publish all meetings with editors and proprietors, including social events.

He added: “Truth is, all politicians come into politics having developed a social circle already. They have friends... I’ve taken the view that we should define the line at fairly senior proprietors and senior editors. I think they are different because of the ability of newspapers to very strongly support particular political parties, so I think there is something to be said for those things being notesd in a transparent way, but they shouldn’t be stopped.

“If it is just social and that’s all there is to it, then transparency is the answer. If you get down to the stage of saying actually this is something were going to monitor incredibly closely who said what and we want a record of your social interactions, I think that gets into the ridiculous area, and obviously then you would get into the work of the just shunt things into the unregulated part.

“Again I think it just goes back to the Ministerial Code, the question of not just reality but perceptions, and I think by publishing them all, we can be clear that – hopefully we’ll influence perceptions and show minsters feel they have nothing to hide in these interactions.”

O’Donnell was also asked about Jeremy Hunt and News Corporations bid for BSkyB, having previously said comments allegedly made by the Culture Secretary, relayed by his special advisor Adam Smith to the company, did not amount to pre-judgment of the deal. O’Donnell said the information should have been passed on to all parties involved in the bid.

He added: “I would have expected the minister to be clear about what he thought his special advisor should be doing. Particularly I think the minister and the permanent secretary will make clear what the nature of engagement should be – if we’re going to use the shorthand – in a quasi-judicial procedure, absolutely."

Talking about the process is fine but you should make sure that the same information is passed on to all parties in a case. Fairness is absolutely crucial to what happened. And that should be at the heat of the whole process, that everyone should be clear that that’s the way they should operate.”

The former cabinet secretary was asked to comment on evidence given by former News of the World editor Andy Coulson, who told the inquiry he held shares in News Corporation worth £40,000 while working as press secretary at Number 10, and had failed to disclose the interest properly.

O’Donnell added: “A form was signed but it didn’t disclose the shareholding, and it should have done."

He went to say the close relationship between some senior police officers and the press had worried him, telling the inquiry he met with then-commissioner Sir Paul Stephenson over potential leaks from the cash-for-honours investigation, headed by assistant commissioner John Yates.

He added: “I raised this issue of there seemed to be certain information which related to a police investigation, a police interview and some politicians. This frequently became public and the question was where was this information coming from. I simply asked Sir Paul Stephenson would he kindly look into the issue, because I didn’t believe the leaks were happening at my end.

“[Yates] was doing this investigation so in a sense I wasn’t necessarily saying that it was him, I was just saying it was an area that he was in charge of and could Sir Paul Stephenson look into that area... it was quite apparent to me that a number of senior police officers had very strong links with the media, and they were very close, and in my view, I would say too close.”

Bob Quick, former chief constable of Surrey Police, previously told the inquiry Yates had resisted an attempt to examine his phone records, to establish the source of the leaks. Quick, who led two reviews into the investigation, said Yates told him “I am very well connected” when he attempted to audit the records, and was unable to establish where the leak had come from.

O’Donnell said he felt the Milly Dowler phone hacking revelations, and the failure of the Press Complaints Commission to investigate hacking allegations, had dented the public confidence in the press. He recommended that his successors in the civil service consider ammending the Ministerial Code once the Leveson Inquiry has published a report of its findings.

Lord Justice Leveson replied: “Ultimately, everything that this inquiry generates will be for the government to consider, I hope on the cross-party basis that set up the inquiry in the first place, because if it ceases to be a cross-party effort it becomes much, much less valuable.”

Asked about future regulation, O'Donnell suggested the Information Commissioner could oversee the press, as he had proved to be independent and objective when dealing with other issues.

News International has today called the suggestion Rupert Murdoch struck a secret deal with Margaret Thatcher “a flight from reality”.

Speaking at the Leveson Inquiry, Rhodri Davies QC, representing the company, said an opening statement to module 3 of the inquiry, examining the relationship between politicians and the press, unfairly represented the former prime minister’s relationship with Murdoch.

Last Thursday Robert Jay QC, inquiry counsel, suggested Murdoch had suffered from “selective amnesia” when recalling a meeting with Thatcher before his purchase of the Times newspapers in 1981. He said the true intentions of the meeting are “capable of bearing on Mr Murdoch's integrity".

Davies said: “It is quite wrong to do, as Mr Jay did last week, to muddy the definition and the boundaries to the point where no difference is seen between a newspaper supporting a politician it agrees with and respects, and a corrupt deal between the two.

“That amounts to saying that it is sinister. Indeed, at the heart of the problem for Mr Murdoch and the Sun and Mr Dacre and the Daily Mail is to support through their pages politicians whose views they agree with.

“But that is exactly what they are meant to do and are expected to do as agents of a free press in a democracy, the problem comes not when they support politicians they agree with but if they prostitute their papers to support politicians they don’t agree with in exchange for favours.”

He said Jay QC’s description of a note of the meeting taken by Bernard Ingham, Thatcher’s press secretary at the time, as "carefully constructed" was unjustified and Ingham “would have to be positively dishonest if a deal was admitted from the record”.

He said the suggestion Murdoch had enlisted the support of Thatcher by striking a deal for political support suffered from a "complete lack of evidence in it's favour".

He added: "The documentary record demonstrates conclusively that there was no express deal and no implied deal either. To call this thesis speculation is to use too dignified a term.”

“There is no basis for Mr Jay’s delayed airing the doubt over [Murdoch’s] credibility. That suggestion had no place in Mr Jay’s opening for module three.

“The base for what follows in News International’s success in the United Kingdom is not a stolen transaction but a proper acquisition and one that saved the papers from closure, or perhaps, from Mr [Robert] Maxwell.”

Culture Secretary Jeremy Hunt may have sought guidance from News Corporation over phone hacking, the Leveson Inquiry has heard.

Rebekah Brooks, former CEO of News International, provided the inquiry with an email sent to her by News Corp’s head of communications, Frederic Michel. The message claimed Hunt wanted advice on his position on the hacking allegations.

Michel wrote to Brooks: “JH is now starting to look into phone hacking practices more thoroughly and has asked me to advise him privately in the coming weeks and guide his and No 10’s positioning."

The email, sent on 27 June 2010, said Hunt would make reference to hacking in a statement on Rubicon, the name for News Corp’s BSkyB bid proposal, calling the knowledge “extremely helpful”.

A spokesman for Hunt, then in charge of overseeing the bid, called the claim “completely inaccurate”.

Brooks, giving evidence to the Leveson Inquiry this afternoon, said she suspected Michel had exaggerated his contact with the minister’s office.

She added: “I think the truth is at the time of the BSkyB bid, I suppose, like most journalists, I viewed public affairs and lobbyists with slight scepticism and I often thought that Mr Michel perhaps over-egged his position. However, he was doing his job. He was passing on information as lobbyist do.

“I always thought the level of access that seemed to come out was pretty good, really.”

The former CEO admitted to discussing the bid with George Osborne in 2010 but said any comments made to David Cameron at a private dinner in the same year where “not to be dwelled on”. James Murdoch had previously told the inquiry he raised the matter with Cameron at the dinner hosted at Brook’s home.

On the conversation with Osborne, she said: “I think it was an entirely appropriate conversation. I was re-reflecting the opposite view to the view that he had heard by that stage from pretty much every member of the anti-Sky bid alliance on many occasions, so I think for one three minute conversation at the beginning of the dinner, I got the opportunity to give our view, I don’t see why that’s inappropriate.”

Brooks told the inquiry she may have spoken to former assistant commissioner John Yates about phone hacking, the 2009 Police Bravery Awards coincided with the Guardian article alleging the practice at News International, but said she had not sat down with the Metropolitan Police officer to discuss it at length.

She refused to disclose the Sun’s source for a 2006 article revealing Gordon Brown’s son had cystic fibrosis, telling inquiry counsel Robert Jay QC that it had come from the father of a fellow patient, with links to a charity.

She said the story had been run with the permission of Brown and his wife, and said the couple had remained friendly after it was published.

She added: “I was very friendly with Mrs Brown she had been through a hell of a lot. First thing I would have said would have been much more considerate and caring. I was very sad for them.”

Brooks admitted the News of the World had mishandled the Sarah’s Law campaign by naming and shaming known sex offenders, but said she could not have predicted reprisals, including one incident where a paediatrician was mistakenly attacked by a group believing the doctor was a paedophile.

She added: “I felt that although there were some aspects to the campaign – and there always risk with any kind of public interest journalism and there’s always risk with campaigning, although there were some issues with the campaign, I was the mechanic in a way to try and explain to the public what the point of the campaign was, was effective and I think there were about 13 or 14 pieces of legislation brought in subsequently on the back of it.”

She went on to deny pressuring Ed Balls MP to sack children’s service director Sharon Shoesmith over the Baby P case, but said she had spoken to then Secretary of State about the case.

Former News International chief executive Rebekah Brooks discussed phone hacking allegations with David Cameron, the Leveson Inquiry has heard.

The former News International chief executive said she had spoken about the scandal with the Prime Minister on a few occasions between 2009 and 2011 in general terms, and after the Guardian reported missing teenager Milly Dowler’s phone had been hacked on behalf of the News of the World.

Brooks told the inquiry Cameron, George Osborne and Tony Blair had commiserated her following her resignation from the company last year. Both Cameron and Blair attended Brooks’ 40th birthday party, thrown by Rupert Murdoch.

She said: “The phone hacking story was a sort if constant, or it kept coming up. We would bring it up but in the most general terms. Maybe in 2010 we had a more specific conversation about it.

“I think it was nothing particularly that he wouldn’t have said publicly, but he was interested in the latest developments and asked me about them and I said to him what I say to everybody when they asked me for an update on it. It was to do with the amount of civil cases coming in around 2010 and we had a conversation about it."

She denied rumours Cameron texted her 12 times a day, saying it was around once a week - twice a week during the 2010 election campaign - and said the messages concerned organising meetings, social occasions and occasionally personal comments.

She added: “[Cameron] would sign them off “DC” in the main. Occasionally he would sign them off “LOL”, actually until I told him it meant “laugh out loud” and then he didn’t sign them like that anymore.”

When asked about News Corporation’s BSkyB bid, Brooks said she had an informal role in lobbying but was not involved in the proposed deal or the strategy behind it. She confirmed evidence given by James Murdoch, who said the bid had been briefly discussed at a dinner with Cameron in 2010, and admitted personally discussing the bid with both the Prime Minister and Osborne.

Brooks admitted having a close personal relationship with Rupert Murdoch, but denied politicians sought access to the proprietor by getting close to her, saying her personal relationships were all appropriate.

She told the inquiry: “I mean we all have lots of different friendships. Old friends, new friends, work colleagues, associates. And through the decade that I was a national newspaper editor, the years I was a CEO and the ten years I was a journalist, some friendships were made. But I don’t think I ever forgot I was a journalist and I don’t think they ever forgot they were a politician.”

Brooks was asked about former prime minister Gordon Brown, who she claimed called to complain after the Sun criticised him for sending a poorly-spelled letter to the mother of a recently deceased soldier. Rupert Murdoch has previously told the inquiry Brown rang him to discuss the Sun’s decision to support the Conservatives in the 2010 election.

Brooks said Brown had shown “extraordinary levels of aggression” as she reassured him she had spoken to Sun editor Dominic Mohan and the Sun’s coverage would not be a series of personal attacks. She told the inquiry earlier Brown “was probably getting the bunting out” when her resignation was announced.

She said: “Previous to that conversation, I had also indirectly had similar – not threats made but similar sorts of comments made about the Sun abandoning Labour after 12, 13 years - hostile comments. So when Mr Murdoch told me his conversation, it didn’t surprise me.”

She added: “I don’t think its fair to say that politicians live in fear of newspapers, they are highly-motivated, ambitious people, and MPs don’t scare easily.”

Brooks said her relationship with Brown became fraught after the Sun took the side of Blair over the infamous “curry shop coup”, the attempt of some Labour politicians to out Blair as prime minister.

She told the inquiry: “It wasn’t a playground spat, they were the Prime Minster and the Chancellor of the Exchequer. We were a newspaper who was looking after the real serious concern of our readers. So it wasn’t that I would stand on one corner of the playground and [Guardian editor] Alan Rusbridger would stand on the other... and it would be he was on Gordon’s side and I was on Tony Blair’s, it just didn’t work like that."

Brooks said the timing of the Sun’s decision to back the Conservative Party in 2009 was decided between her, Mohan, the paper’s political team, and James and Rupert Murdoch, denying Cameron and his advisors had a role in the timing of when the support would be announced. James Murdoch told Cameron of the shift in September 2009.

She admitted disagreeing with Murdoch during her time as editor of the Sun, on several issues including the amount of celebrity coverage in the paper, but said they spoke “very frequently”.

She added: “You only have to look at the viewing figure of the BBC or ITV to see that it’s the celebrity programs, the reality programs that do so well, and I took from those figures that our readers were quite interested in that. He thought there was too much of it, although he liked the X Factor.”

Asked about Rupert Murdoch’s comment to reporters that the CEO was his priority in the hacking scandal, Brooks said she was not embarrassed at the time because she believed he was referring to the issue rather than her personally.

She told the inquiry: “He was being asked by many reporters lots of different questions, and I think someone said ‘what is your priority’ and he looked towards me and said ‘this one’. I took that to mean he meant as in this issue. It was only the next day when I saw how it could have also been interpreted in the papers that I realised that was the interpretation that had been put on it. I wasn’t embarrassed at the time because I didn’t know that that’s what he meant."

Brooks continues to give evidence this afternoon.

An application made at the Leveson Inquiry to scrutinise information relating to Operation Motorman has been challenged today.

On Tuesday, David Sherborne, barrister for the core participant victims in the inquiry, asked Lord Justice Leveson to consider examining which journalists used private investigator Steve Whittamore to gain information illegally, and whether data had been retained and was still being used by newspapers.

Desmond Browne QC, acting for Mirror Group Newspapers, called the task "impossibly burdensome" and said it did not address the terms of the inquiry. The opposition was echoed by Antony White QC, for News International - who said it would require a "disproportionate effort" - and Jonathan Caplan QC for Associated Newspapers.

White QC also requested he be allowed to make an opening statement on behalf of News International, following opening remarks for module 3 made yesterday by inquiry counsel Robert Jay QC.

Lord Justice Leveson is expected to make a decision on the application in a few days.

An application for scrutiny of the Operation Motorman material was made at the Leveson Inquiry today.

David Sherborne, the barrister acting on behalf of press intrusion victims at the inquiry, asked Lord Justice Leveson to consider information uncovered by the investigation, which examined the mining of private information by private investigator Steve Whittamore.

He told the judge: “Your hands are not tied therefore in relation to what Operation Motorman reveals about the press as a whole, and it's therefore all the more important, I submit, that this is fully investigated under modules one and two [of the inquiry].

“Let us not forget what Operation Motorman has shown us about the culture, practices and ethics of the press, and that is the endemic use across the boards of unlawfully purchasing information, not just about the rich and famous, but about the members of the public who have found themselves under the attention from newspapers."

Sherborne said the investigation uncovered a widespread practice of buying information from private investigators and asked the judge to look at steps taken against journalist clients of Whittamore and whether information obtained by the investigator is still being retained and used by newspaper publishers.

He said: “[Whether] this is more or less serious than hacking is irrelevant, because both were the unlawful tricks of a very tawdry trade in people’s private information.. these newspapers continued to use Mr Whittamore after his offices were raided, after he was arrested, after their journalists were interviewed, after Mr Whittamore was convicted and even after [ICO report] ‘What Price Privacy Now’ was published.”

He later added: “I apologise for being colloquial, but the question for you is: was it cover-up or clean-up once Operation Motorman had revealed what it revealed?”

Lord Justice Leveson said he would consider investigating whether information accessed by Whittmore was being held by newspapers as it was relevant to the “here and now” of the inquiry.

DCI Brendan Gilmour told the inquiry this morning how officers working for Operation Glade, investigating police corruption, interviewed seven journalists from national newspapers under caution in 2004. Sherborne said this was done with the “full knowledge and support of the newspaper’s legal departments”.

The Mail Online mistakenly reported Amanda Knox had been found guilty of murder because of “human error and overzealousness” , the website’s editor has told the Leveson Inquiry.

The Mail was one of several news outlets criticised for publishing a story immediately after a verdict was announced during the trial last year, stating Knox had been found guilty of killing student Meredith Kercher in Italy. Martin Clarke said the site had prepared two stories in advance and accidentally published the wrong one because of confusion over the verdict.

He told the inquiry: “The thing than made me angriest was that there was no need for it... We had a thorough inquiry, as you can tell, advice was issued, firm advice, to people, and I’ll be very displeased if any of those things happen again.”

Clarke, who said the Mail Online publishes 400-500 stories a day, was asked about his editorial and commercial control. He said the site has become popular worldwide because of it responds to the demands of the audience.

He added: “Millions and millions of people enjoy popular culture and thank goodness for showbiz stars that they do, otherwise they’d all be out of business. There’s nothing wrong with watching X Factor or reading about it. I have to produce a website which makes a profit because profit is the only real way of having any freedom in journalism.

“Most [celebrities], they’re biggest concern in life is not appearing on it. This is a very good example of a nexus between PR, freelance pictures agencies and newspapers and websites. And quite often I think the inquiry has to guard against pictures that might to the man in the street seem to be intrusive were in fact taken with the celebrity’s full consent."

The editor said a picture set of an actress from the popular television show ‘The Only Way is Essex” on holiday was not intrusive.

He said: “It was self-evident to me that those pictures were taken with consent. You can see the photographer, its on a very short lens, right in front of her... I would stake my year's salary on it being taken with consent.”

He echoed evidence given by Paul Silva, the Daily Mail’s picture editor, earlier this year, saying the site abided by an unofficial embargo of pictures showing Pippa Middleton going about her day-to-day business. He insisted the Mail Online had a good track record with complaints and called its sister paper “an ethical and decent newspaper run by decent people”.

He added: “Quite often [celebrities] will ring up and say ‘you didn’t get that quite right’, or ‘I’d rather you didn’t say that’ or ‘actually the truth is this’, so quite often we’ll just correct content as we go along."

David Barr, junior inquiry counsel, pointed out the Mail Online has had 205 legal complaints – 35 for privacy issues – in the last three years, compared to six privacy complaints through the Press Complaints Commission.

On regulation, Clarke expressed concern that tightening restrictions would leave news websites with a disadvantage compared to US competitors.

He said: “My question is: do you need to regulate the internet anymore than you need to have a policeman standing in the corner of very pub watching what everyone says?”

“Now we’re obsessing over an industry that is, as I say, becoming less important, and in the course of fighting the last war, we’re going to stop newspaper websites from winning the next one, quite frankly, if we place the British press and British websites under a regulatory environment that is too strict.”

The Metropolitan Police has said today it was impossible to conclude how messages from Milly Dowler’s voicemail were deleted, creating "false hope" for her family.

A statement from DCI John MacDonald, a senior officer investigating the potential deletions, was read out before the inquiry today. He said it was possible an illegal intercept had resulted in messages being deleted, but could also have been done automatically by the phone service.

MacDonald said the lack of call data, and the amount of time that has passed since the teenager’s disappearance in 2002, means there is not enough evidence to prove whether or not the News of the World was responsible.

The statement added: “Taking all the relevant information into account it is not possible to state with any certainty whether Milly’s voicemail were or were not deleted.”

As a result of Milly’s voicemail becoming freed up by the deletion of messages, her mother Sally Dowler described a moment of “false hope” in 2002, believing her daughter could still be alive if the messages had been accessed.

The Dowlers had previously said the moment occurred in April or May 2002 but the Met now say they have proved it to be on March 24.

David Sherborne, representing core participant victims, read a short statement from the Dowler family, which thanked MacDonald as his team for investigating the matter.

It continue: “If Surrey Police had prosecuted this activity in 2002 then the position would have been very different and perhaps countless others might also have been avoided having their private messages hacked into by the News of the World.

“Police neglect and deference meant that it took the relentless efforts of one journalist to uncover what the police knew had gone on, and whilst we would never have wished to have been thrust into the middle of this extraordinary scandal on top of what we have already had to deal with as a family, we continue to have faith that his efforts and the efforts of the inquiry and Operation Weeting will have a lasting positive impact.”

The Met said they have been working to discover whether the messages had been accessed before the 26 March 2002, but call data and Surrey Police logs on the missing teenager’s phone did not match up, and a message marked as saved on the service could have been accessed by a third party.

The statement added: “The fact that this message was marked as saved could mean that someone had listened to Milly’s voicemail after her disappearance and prior to the police obtaining access to her voicemail facility later on 26 March 2002.”

MacDonald said he could not rule out that someone had accessed the service and listened to the message during this period, but incomplete call data meant the accuracy of the theory could never be proved.

He added: “In summary we cannot conclusively say whether any voicemails were or were not manually deleted, however there do appear to have been two messages missing that should have been present when Surrey Police carried out their second recorded download of 17 April. It is not known why that happened and it will not now be possible to provide an explanation.

“In light of the NoW revelation that they or a third party has accessed the voicemail it is possible that the messages had previously been listened to by unknown persons and deleted.”

Sherborne suggested a “lethal cocktail of three potential ingredients – the failure of Surrey Police, the decision of the Met to close the 2006 hacking investigation and concealment by News of the World senior staff – was responsible for the uncertainty around how the voicemails were deleted".

He added: “While some questions stay and may always remain unanswered there are some to which we do know the answer. The News of the World did hack into Milly Dowler's phone searching for a scoop at a time when she had already been murdered. That fact alone is horrifying enough.

“We also know that the newspaper interfered seriously with the police investigation trying to use the information they had illegally obtained to get an exclusive on Milly's movements.

“Thirdly this inquiry investigating as it has done the practices, culture and ethics of the press would have happened regardless of the question which arose at the start of the evidence that Sally Dowler's false hope moment may have been the result of activity of someone at or working for the newspaper.”

Guardian lawyer Gill Phillips said the statement clearly showed Surrey Police had linked the potential deletions to the News of the World in 2002, but admitted her paper had made an error in reporting the cause of the deletions as fact rather than the belief of several people involved in the case.

Journalist Nick Davies had been pursuing the story for years and pushed the hacking scandal into the headlines last year, suggesting the News International title had been responsible for deleting the messages.

Lord Justice Leveson this morning addressed an application sent to the Leveson Inquiry by non-profit organisations, asking the judge to consider a ruling allowing government advisors early access to confidential inquiry documents.

Full Fact, The Media Standards Trust, Index on Censorship and English PEN made the application yesterday, urging Leveson to publish the names of any senior civil servants who will be able to see this material, to make sure the process remains transparent. It follows a ruling made last week, granting core participant status to David Cameron, Nick Clegg, Vince Cable, Jeremy Hunt, Michael Gove, Theresa May, Ken Clarke and George Osborne.

The judge said he would not publish names but expected government ministers granted core participant status to restrict their “confidentiality circle” to a minimum. He also said requests for redactions to evidence by ministers would be treated in the same way as those of other core participants.

He said: “There is the principled and strictly impartial approach for the redaction of documents submitted to the inquiry, which is in place in relation to evidence submitted by the government core participants, as it has been in relations to others.

“The practice adopted has worked well and I see no reason to take a different approach in relation to government core participants... It would more importantly give rise to a heighten risk of material which rightly deserved redactions being inadvertently disclosed in the public domain.

“I do not doubt the good faith of those who have raised these issues although in the light of the way that I have tried to conduct this inquiry throughout, I am somewhat concerned that it is thought that I might be party to reducing its transparency. Suffice to say I will not, and I would be surprised if I were asked to be.”

Leveson said if a minister seeks to provide a restriction notice, that will itself be the subject of discussion within the inquiry.

The Leveson Inquiry has heard from senior officers investigating corruption in the police force today.

DCI Brendan Gilmour, who worked on Operation Glade, investigating police corruption from 2002 to 2005, said seven journalists were interviewed under caution in 2004 after evidence suggested they had been commissioning private investigators to obtain information illegally.

The officer said all of the journalists – two working for the News of the World, one for the Mirror, one for the Sunday Mirror, one for the Mail on Sunday and two freelancers – had said they would not have used private investigator Steve Whittamore, or other agencies, if they had known how information had been accessed.

He said there was clear evidence that civilian employee Paul Marshall was providing information from the police national computer to private investigators at the request of a number of reporters.

He added: “It was put to the journalists that the speed with which the checks were being turned around would suggest they weren’t being obtained through the courts or court records but that said we couldn’t establish guilty knowledge of the part of the journalists as to where that information was coming from.”

Robert Jay QC, inquiry counsel, pointed out the journalists were sent written invitations to attend places to be interviewed under caution, and had legal advice, meaning answers could have been orchestrated in advance.

In March 2004, the Crown Prosecution Service advised there was insufficient evidence to charge any of the journalists.

Gilmour told the inquiry: “I accepted the decision on the basis that we couldn’t prove guilty knowledge. I wasn’t disappointed with the CPS taking that decision; I was disappointed that we couldn’t prove guilty knowledge.”

Russell Middleton, an acting chief constable and deputy senior investigating officer on Operation Reproof, examining corruption at Devon and Cornwall police, said he had discovered a flow of information from an officer to a private investigator, who then passed it on to various companies.

He added the police never found evidence of requests from journalists, but it would have been included in the scope of the inquiry.37 people were investigated under Reproof, and two serving police officer, two former officers and two private investigators were charged in 2004. Middleton said two senior politicians had been named in the evidence retrieved.

David Sherbone, counsel for the victims at the inquiry, requested that he be able to address Gimour’s evidence later this afternoon.

A clause allowing journalists to speak out against unethical behaviour in newspapers is a "good idea", Rupert Murdoch has said.

The proprietor endorsed the conscience clause, proposed by the National Union of Journalists, when answering questions submitted by the union at the Leveson Inquiry, admitting he had never heard of the idea before. The clause could be inserted into employment contracts, allowing staff to speak out on bullying and unethical newsgathering.

During the hearing, he asked John Hendy QC, representing the NUJ, why an anonymous journalist complaining of bullying at the News of the World had not simply resigned.

Lord Justice Leveson replied: "I think the problem with that might be that she needs a job."

To the surprise of the judge, Murdoch said he was not aware of the settlement between the News of the World and former sports reporter Matt Driscoll, who was awarded £792,736 in 2009 after being unfairly dismissed by the paper. Driscoll claimed he had experienced a culture of bullying led by editor Andy Coulson.

Murdoch said he did not believe there had been any unethical treatment of journalists and photographers at News International and said staff at the News of the World seemed to be a "happy bunch" whenever he had visited the newsroom.

The proprietor was questioned by John Hendy QC, representing the NUJ, over evidence submitted to the by anonymous journalists, presented by the union's general secretary Michelle Stanistreet in February.

Murdoch said staff can take complaints to News International's internal staff association, funded by the company. He disagreed with Hendy, who suggested allowing the NUJ to represent NI journalists would be one step in eliminating bad practice.

Rupert Murdoch has denied Jeremy Hunt was "on the side" of News Corp over the company's failed BSkyB takeover bid.

He told the Leveson Inquiry he did not believe he had met the Culture Secretary and had never discussed the bid with him. It was revealed at the inquiry on Tuesday James Murdoch had spoken briefly with David Cameron about the takeover at a dinner in 2010.

Murdoch said he and his son were "shocked" over comments made by business secretary Vince Cable, who was stripped of his powers overseeing the bid after being secretly recorded by Daily Telegraph reporters. Cable said he had "declared a war on Murdoch".

He added: [James] told me when Mr Cameron removed Mr Cable’s responsibility and put in Mr Hunt, but I don’t believe he commented on it... We just thought we’d probably get a fairer go from anyone other than Dr Cable."

I never saw anything wrong in what we were doing. It was as commonplace transaction. A large one but a commonplace one."

A selection of emails between Frederic Michel, head of public affairs for News Corp in Europe, and Hunt's special advisor Adam Smith were shown to the inquiry on Tuesday, revealing a backchannel of information over the bid passing from Hunt's office. Smith has since resigned.

Mudorch told the inquiry: "It’s only much more recently that I've learnt of the extent of Mr Michel's – you can call it lobbying, certainly his seeking of information and the progress of things... I didn’t see anything wrong with his activities. Was I surprised that it had gone on so long and there were so many emails? Yes sir.""I don’t want to sat anything against Mr Michel but I think there could have been a little bit of exaggeration there."

The proprietor admitted he had only "tasted" the emails and had not read the entire collection, and said at the time he had been more concerned with the hacking scandal, leaving the deal in the hands of his son.

He admitted being surprised with the success of a competitors' alliance, including the Guardian and the Telegraph, opposing the bid, and implied News Corp would have been successful were it not for the hacking scandal breaking in 2011.