The Prime Minister in Paris denied doing any favours for Mr Murdoch after the Mr Blair's official spokesman in London had angrily described as "a joke" reports Mr Blair had intervened on Mr Murdoch's behalf over the takeover with Romano Prodi, the Italian Prime Minister.
"It is not a question of offering assistance to anyone," said Mr Blair. "I treat Mr Murdoch no differently to anyone else." He said he took an interest "in any business with British interests", but refused to discuss a private telephone call with Mr Prodi.
Downing Street sources insisted that the call came from Mr Prodi. That version of events was confirmed in Rome. However, Mr Blair's spokesman refused to deny that Mr Blair used the opportunity to discuss the Murdoch issue. "They had a discussion about common issues and I do not intend to brief upon all of it," said the spokesman.
Last night, Downing Street also refused to discuss suggestions in Italy that the Prime Minister recently met Mr Murdoch. "I have no information about whether there were meetings with the Prime Minister," said a Number Ten source. "I am reluctant to go through the diary on what would have been a private meeting."
The unanswered questions could prove embarrassing for Mr Blair as the Government faces the prospect of having to overturn a Lords defeat on the Competition Bill which, if unchanged, could prevent Mr Murdoch selling the Times, owned by his News Corp group at a cut-rate price.
The embarrassment for the Prime Minister over the reports may have been eclipsed by the discomfort for Mr Murdoch who had found himself sucked into a complex Italian political game in which he was played for a fool.
According to Mr Murdoch's Italian financial advisers, it was Silvio Berlusconi, the Italian Opposition leader and former prime minister, who initiated the dialogue with Mr Murdoch by inviting BSkyB, in which he has a stake, to make an offer for Mr Berlusconi's media holding company Mediaset.
Sources in Italy said Mr Murdoch could not have talked to Mr Blair before Friday at the earliest. That was the day the deal collapsed and Mr Murdoch left Italy. But it seems he left a door open: Mr Murdoch and Mr Berlusconi met again in London on Saturday to discuss other areas of possible mutual interest.
"The deal is off for the moment, but I would not be surprised if negotiations resumed for a third time," commented one source close to the Murdoch camp. Shares in Mediaset fell on Monday on news that the takeover had collapsed, but they steadied yesterday. Mr Berlusconi's previous flirtation with selling to Mr Murdoch, in 1995, went nowhere as Mediaset opted instead for a recapitalisation and a flotation on the Milan stock exchange.
"Mr Murdoch did not want a repeat of his last negotiations, which lasted several months before ending in failure. He agreed to make an offer, but gave Berlusconi just 72 hours to decide," explained Luca Arnaboldi of the legal firm Carnelutti in Milan, which advised Mr Murdoch on his dealings with Mediaset.
An offer of 10,000 lire per share - or 5.8 trillion lire for Mr Berlusconi's controlling 50.6 per cent stake in Mediaset - was put on the table over dinner at Mr Berlusconi's private chateau at Arcore 10 days ago. Mr Murdoch then withdrew to the Villa d'Este on the shores of Lake Como and waited for a reply.
On Thursday, with just hours to go before the deadline, the supposedly top-secret talks began to be artfully leaked. Senior figures in Italy's centre-left coalition government immediately reacted, urging Mr Berlusconi to prevent the country's private television stations falling into foreign hands.Reuse content