Hunt's adviser and Murdoch lobbyist to face Leveson

Inquiry to question pair whose email exchanges on BSkyB bid pose threat to Culture Secretary

Jeremy Hunt's former special adviser, whose email exchanges with News Corp appeared to show the Culture Secretary offering a running commentary on the sensitive BSkyB bid, will appear at the Leveson Inquiry next week.

Adam Smith, who resigned his government job last month, will give evidence on the same day as Fred Michel, News Corp's senior vice-present of government affairs. Mr Hunt's political survival may depend on the evidence from Mr Smith.

Mr Michel wrote a vast cache of emails, published by the inquiry last month, showing him passing information direct to his boss, James Murdoch. The details appeared to originate from the Culture Secretary.

Mr Hunt has insisted there was was an appropriate relationship between himself and Mr Michel, and insisted his judgement during the BSkyB bid always respected his quasi-judicial role. The best outcome for Hunt, who will give his version of events to the inquiry before the end of the month, will be if Mr Smith admits he presented an insider view of Government thinking without Mr Hunt's explicit authority. Anything less, and Mr Hunt's hold on his Cabinet position will be severely weakened.

With criminal charges this week brought against Rebekah Brooks, the former chief executive of News International and a friend of the Prime Minister, Downing Street can ill afford a forced resignation from Mr Hunt over the Government's handling of the BSkyB bidding process.

David Cameron yesterday dropped his guard on the recent pressure over phone hacking his Government has been under, when he told ITV's Daybreak programme, that the police and the justice authorities had to follow the evidence on the hacking scandal "wherever it leads".