Vulnerable heir James Murdoch defends gagging deals

James Murdoch defended his authorisation of a £700,000 payment to Gordon Taylor, the chief executive of the Professional Footballers' Association, and said he had acted on legal advice.

The presumed heir to the News Corp empire had clearly identified his signing off of the payment to the hacking victim as a potential problem. "The underlying fact was not in dispute," he told the MPs, adding that the company's lawyers advised him that "the company would lose that case".

The payment is seen as crucial in determining Murdoch Jnr's suitability to run a major company and how much he appraised himself of the extent of phone hacking.

"There was no reason at that time to believe... it was anything other than in the past," he said, adding that he had been advised on the matter by Tom Crone, the former News of the World legal manager who quit the company last week, and Colin Myler, the last editor of the paper, which was closed down this month.

He said he believed that the confidentiality clauses imposed on Mr Taylor and another victim, the publicist Max Clifford, as part of their settlements were standard legal procedure.