MPs today voted down a Labour demand for Culture Secretary Jeremy Hunt to be referred to the Prime Minister's independent adviser on ministerial standards for investigation over his handling of News Corporation's bid to buy satellite broadcaster BSkyB.
Despite Nick Clegg's decision that Liberal Democrat MPs would abstain, Conservatives easily saw off the challenge by a majority of 290 to 252.
The vote came after David Cameron told MPs that his adviser, Sir Alex Allan, had written to him to say that he could not "usefully add to the facts" in the Hunt case uncovered by the Leveson Inquiry into media standards.
But Labour dismissed Mr Cameron's comments as an ineffective "smokescreen" and said that the Prime Minister's judgment in appointing Mr Hunt to a quasi-judicial role in the BSkyB bid was in question.
Mr Hunt gave a robust defence of his actions in the Commons chamber, describing Labour allegations that he deliberately misled Parliament as "disgraceful".
He admitted he may have inadvertently provided incorrect information when he claimed in the Commons to have released all his correspondence relating to the deal, but insisted he corrected the record at the earliest possible opportunity.
But Labour MP Chris Bryant accused him of lying to Parliament by failing to disclose a memo which he sent to Mr Cameron days before being given responsibility for the BSkyB bid, in which he argued the case for News Corp to be allowed to buy up the 61% of the satellite broadcaster which it did not already own.
Mr Hunt denied having allowed his personal views to influence his impartial handling of the bid, telling MPs: "The real story of this bid was insistence by me at several key stages on decisions that News Corp did not consider in their interests... This was not an easy process, nor was it ever likely to command popular support; but the decisions taken were done so fairly and my department deserves enormous credit as a result."
Deputy Prime Minister Nick Clegg gave his strongest defence yet of the Culture Secretary, despite last night suggesting that Mr Hunt should be subjected to a sleaze investigation.
Giving evidence to the Leveson Inquiry, the Liberal Democrat leader said: "On the specific point on how he handled the bid to make sure that he was insulated from accusations of allowing personal bias to drive the process, I think he has given a full, good and convincing account to this inquiry."
Mr Clegg's decision to tell his MPs not to join Tories in the No lobby for this evening's vote has sparked tensions within the coalition and fury among some Conservative backbenchers.
One MP - Swindon North's Justin Tomlinson - was called back from honeymoon to bolster numbers, while Conor Burns left his hospital bed to vote. The resentment felt by some Tories was reflected in a Twitter message from the Bournemouth West MP: "Out of my hospital bed and on way to HoC for vote so our coalition partners can polish their consciences. Many of us won't forget this."
Mr Cameron insisted he understood the Lib Dems' decision to abstain, telling MPs: "What we are talking about here is the relationships Conservative politicians, and frankly Labour politicians, have had over the last 20 years with News Corporation, News International and all the rest of it.
"To be fair to the Liberal Democrats, they didn't have that relationship and their abstention tonight is to make that point and I understand that. It's politics."
But Labour leader Ed Miliband said Mr Cameron was suffering from a "delusion" and was refusing to refer Mr Hunt to his adviser "because he is scared the Culture Secretary won't be cleared".
"The reality is this - everyone knows it was the Prime Minister who decided to appoint the Culture Secretary to oversee the bid and the Prime Minister who is clinging on to him now in the face of all the evidence," said Mr Miliband.
"It is no longer about the Culture Secretary's judgment. It is about the Prime Minister's judgment, which is so deeply flawed even his deputy won't support him."
In a noisy session of Prime Minister's Questions which was dominated by the Hunt affair, Mr Cameron said he stood by his decision.
"It is the job of the Prime Minister to make the judgment about the ministerial code and I've made that judgment," he said.
The PM revealed that he wrote to Sir Alex this morning, to inform him of his plans to extend the ministerial code of conduct to cover the conduct of special advisers and the exercise of quasi-judicial responsibilities like those held by Mr Hunt in the BSkyB case.
Mr Cameron is expected to give further details when he appears before Leveson tomorrow. Downing Street said he had been receiving advice from a QC and the Treasury solicitor as he prepared. One aide said: "I don't think he is nervous, but it is a very serious thing, so you would expect him to be doing preparation."
In his letter, Mr Cameron told Sir Alex: "As you know, I have decided not to refer Jeremy Hunt to you as I am satisfied that the relevant information about this issue has been established and I am content that he did not break the ministerial code."
Responding shortly afterwards, Sir Alex wrote: "I note your decision in relation to Jeremy Hunt's adherence to the ministerial code, which is of course a matter for you. The fact that there is an ongoing judicial inquiry, probing and taking evidence under oath, means that I do not believe I could usefully add to the facts in this case."
A senior Labour spokesman dismissed the significance of the exchange: "This is a David Cameron smokescreen. It is not an effective one.
"The questions are about the Prime Minister's judgment. We know what the facts are. We know he has failed to exercise proper judgment."
Mr Clegg was absent from PMQs, which took place as he gave evidence to the Leveson Inquiry, and no Lib Dem MPs voted in the division on Labour's motion later in the day.
But there was a strong turnout of Conservative MPs to support the Culture Secretary, who was flanked on the front bench by Chancellor George Osborne and Education Secretary Michael Gove.
Labour deputy leader Harriet Harman told MPs there were two issues at stake: whether Mr Hunt misled Parliament and whether he should have taken responsibility for his special adviser Adam Smith, who resigned after admitting getting too close to News Corporation during the £8 billion BSkyB bid.
Ms Harman told the Culture Secretary: "Either you didn't know what he was doing when the special adviser was overstepping the mark and that was a breach of the code or - as people think more likely - you did know what he was doing when Adam Smith was overstepping the mark and that too would have been a breach of the code.
"Whichever way you look at it, there has been a clear breach of the ministerial code."
Mr Hunt said his special adviser had "paid a high price" for his conduct, but denied failing to take responsibility for his activities.
"Adam Smith is someone of the highest integrity but he did engage in some contact with News Corporation that was inappropriate and he has resigned," said the Culture Secretary.
"I didn't know or authorise that contact, but in accordance with the ministerial code I accepted responsibility for it by making a statement to this House the day after that contact became apparent."