How the 'Minister for Murdoch' made case for BSkyB deal

Day of dramatic evidence reveals Jeremy Hunt's intimacy with the media mogul's empire. Martin Hickman explains its significance

Jeremy Hunt's appeal to PM

In November 2010, the Culture Secretary Jeremy Hunt sent a memo to David Cameron expressing support for the BSkyB bid. At the time, Vince Cable, the Liberal Democrat Business Secretary, had just announced his intention to refer the takeover to Ofcom. In the memo, Mr Hunt expressed the force of James Murdoch's anger at the decision.

Mr Hunt also warned of a possible legal challenge by Rupert Murdoch's company – and said the deal would be bad for business. Mr Hunt suggested that "sensible controls" could be put in place to ensure that News Corp did not become too dominant. After Mr Cable was secretly recorded saying he had "declared war" on the Murdochs and was stripped of responsibility for the decision, Mr Cameron handed it to Mr Hunt.

Why does this matter?

It shows the Prime Minister handed the decision on a multibillion-pound deal, by a company whose newspapers had switched their support to him a year before, to a man he knew supported it. Despite claiming the decision was "quasi-judicial", it now looks like it was a stitch-up to help the ruling party's friends.

James Murdoch's plans

The Hunt-Cameron memo also reveals the scale of James Murdoch's ambition. According to Mr Hunt, Rupert Murdoch's son wanted to emulate his father's success in smashing the print unions and introducing new technology in the 1980s with his plans for BSkyB. Mr Hunt wrote: "Essentially, what James Murdoch wants to do is to repeat what his father did with the move to Wapping and create the world's first multiplatform media operator available from paper to web to TV to iPhone to iPad."

Why does this matter?

Despite denying this at the time, News Corp was secretly planning to integrate its newspapers into BSkyB. By offering packages for The Sun and The Times to the broadcaster's 10 million subscribers, it could crush already struggling rival newspaper groups, reduce media plurality and utterly dominate British public life.

Attempts to control the Milly Dowler story

The inquiry disclosed that News Corp had lobbied Downing Street during the outrage which followed the Milly Dowler story to keep the BSkyB takeover on track. The phone hacking scandal had been bubbling away for years, but it exploded on 4 July last year when it was revealed the News of the World had hacked Milly Dowler's phone.

On 6 July, News Corp lobbyist Fréd Michel tried to organise a dinner with News International's general manager, Will Lewis, and Craig Oliver, David Cameron's press chief, to discuss the situation. On 10 July, Mr Michel emailed George Osborne's aide Rupert Harrison with advice: "Quick question... you think it would be possible/helpful to get a senior govt person to come out condemning strongly phone hacking, ask for thorough police investigation but insisting on the need for the legal process to be followed."

This was the tack Mr Cameron and other senior Conservatives took last July: that the BSkyB takeover was a different matter to the lawbreaking at its British newspaper group.

Why does this matter?

At a time when News Corp was publicly expressing distress that its journalists had targeted the families of murder victims, it was lobbying senior government figures to protect its commercial interests.

More than 1,000 messages

While the Government was supposedly impartially deciding the BSkyB bid, there was intense contact between the parties. The inquiry's QC Robert Jay disclosed there were 191 telephone calls, 158 emails, and 799 text messages between Fréd Michel and the Department of Culture. Between 28 November 2010 and 11 July 2011 – the critical period for Mr Hunt – Adam Smith, his special adviser, texted Mr Michel 257 times.

Why does this matter?

The Government has a legal duty to act impartially towards businesses. Many rival media organisations such as the BBC, Telegraph Group and Associated Newspapers were opposed to the bid, but it appears the Government had secretly established a back-channel of communication with News Corp.

Fréd Michel not a fantasist

News Corp's lobbyist did not appear to be the type of person who would fabricate a close relationship with the Department of Culture, as some have suggested. Evidence suggested there were indeed similarities between the text messages Mr Michel had received from Mr Smith and the emails he dashed off to his boss at News Corp minutes later.

However, Mr Michel did exaggerate some details, such as saying that Mr Hunt was about to see Swan Lake (when he was not), referring to a 34-minute conversation as lasting an hour and almost always listing his source as "JH", when it was actually Mr Smith.

Why does this matter?

Mr Michel's emails indicate that Jeremy Hunt's department was slipping inside information about the BSkyB bid to News Corp. Increasingly, it looks like the Government was not acting impartially and that the Murdochs' had an extraordinary degree of influence.

Adam Smith concedes Mr Hunt was supportive

Despite initially saying his boss was not supportive of the bid, Mr Smith had to concede he was, at least on some occasions, favourably inclined towards News Corp.

Why does this matter?

Mr Smith did not dispell the impression that Mr Hunt was secretly moving News Corp towards its prize.

They want to do another Wapping... Hunt's memo to PM

From Jeremy Hunt

To David Cameron

Date 19 November 2010

James Murdoch is pretty furious at Vince's referral to Ofcom. He doesn't think he will get a fair hearing from Ofcom. I am privately concerned about this because News Corp are very litigious and we could end up in the wrong place in terms of media policy. Essentially what James Murdoch wants to do is to repeat what his father did with the move to Wapping and create the world's first multiplatform media operator available from paper to web to TV to iPhone to iPad. Isn't this what all media companies have to do ultimately? And if so we must be very careful that any attempt to block it is done on plurality grounds and not as a result of lobbying by competitors.

The UK has the chance to lead the way on this as we did in the Eighties with the Wapping move but if we block it our media sector will suffer for years. I am sure sensible controls can be put into any merger to ensure there is plurality but I think it would be totally wrong to cave into the Mark Thompson/ Channel 4/Guardian line that this represents a substantial change of control given that we all know Sky is controlled by News Corp now anyway.

What next? Ofcom will issue their report saying whether it needs to go to the Competition Commission by 31 December. It would be totally wrong for the Government to get involved in a competition issue which has to be decided at arm's length. However I do think you, I, Vince and the DPM [deputy prime minister] should meet to discuss the policy issues that are thrown up as a result.

Hunt and the lobbyist: The key texts

Private text messages between the Culture Secretary, Jeremy Hunt, and the News Corp lobbyist Frédéric Michel, shown to the Leveson Inquiry, revealed a close relationship that blossomed after the pair "shared a night of anxiety" at Chelsea and Westminster hospital, where their wives both gave birth in late May 2010.

Frédéric Michel to Jeremy Hunt, 20 January 2011, after formal meeting to discuss the bid

"Great to see you today, we should get little [names of children] together in the future to socialise. Nearly born the same day at the same place! Warm regards, Fred."

Hunt to Michel, 20 January 2011

"Good to see u too. Hope u understand why we have to have the long process. Let's meet up when things are resolved J."

Michel to Hunt, 3 March 2011, the day Mr Hunt announced he was accepting News Corp's Undertakings in Lieu

"You were great at the Commons today. Hope all well, warm regards, Fred."

Hunt to Michel, 3 March 2011

"Merci. Large drink tonight!"

Michel to Hunt, 13 March 2011, after Hunt was on the Andrew Marr Show

"Very good on Marr, as always."

Hunt to Michel, 13 March 2011

"Merci hopefully when consultation over we can have coffee like the old days!"