04/25/2012 08:04 EDT | Updated 06/25/2012 05:12 EDT

Rupert Murdoch denies seeking Tory favours

News Corp. chairman Rupert Murdoch denied today that he has ever sought favours from the British government in return for favourable coverage by his newspapers.

Murdoch was testifying before the U.K.'s media ethics inquiry investigating the relationship between media and government.

Murdoch, 81, whose son James testified on Tuesday, was interrogated by counsel Robert Jay about a lunch he had with then Prime Minister Margaret Thatcher before he took over the Times in 1981 from Canadian-based Thomson Corp.

He was asked about suggestions he might have been seeking favours from the government of the day, which he denied.

"I have never asked a prime minister for anything," said Murdoch, who is slated to appear again on Thursday.

The inquiry, chaired by Lord Justice Brian Leveson, was set up after allegations of phone hacking by Murdoch newspaper personnel were exposed in a series of articles in the Guardian. In the aftermath, Murdoch closed the News of the World and apologized.

The inquiry was broadened into media ethics and the intersecting relationship between commercial media owners and British politicians.

"The need [for the Leveson inquiry] is fairly obvious," Murdoch said. "There have been some abuses shown …. The state of the media in this country is of absolutely vital interest to all its citizens …. Frankly, I welcome the opportunity, because I wanted to put some myths to bed."

Murdoch was grilled extensively on his relationship with politicians and whether his "commercial interests" were being promoted in those relationships.

The media tycoon issued various denials, including that:

- Former prime minister Tony Blair of the Labour Party had consulted with him on how to discredit French leader Jacques Chirac in the run-up to the 2003 invasion of Iraq.

- He strategized with Blair's successor, Gordon Brown, on whether to call a snap election

- He lobbied Prime Minister David Cameron on issues including broadcasting regulations, the ins-and-outs of which have since helped feed the scandal.

He did allow having made a colourful joke reported by Blair: "If our flirtation is ever consummated, Tony, then I suspect we will end up making love like porcupines, very very carefully."

But he denied that his personal friendship with Blair had led to any favours, thumping the table to punctuate his sentence.

"I never. Asked. Mr. Blair. For anything," he said.

'Recurring theme'

Asked whether his influence through newspapers such as the Sun and the News of the World was used to help his British Sky Broadcasting Group PLC commercial interests, Murdoch vigorously denied it.

"I welcome that question, Mr. Jay, because I want to put it to bed once and for all …. It is a complete myth … that I used the influence of the Sun or the supposed political power ... to get favourable treatment."

Mr. Jay pressed him on whether there wasn't "a recurring theme" in Murdoch's discussions with political figures, but Mr. Murdoch steadfastly denied it.

"After a while, if these lies are repeated again and again, they sort of catch on," he said. "And particularly, if we're successful, people are resentful and grab on to them. But they just aren't true."

Asked if he had discussed with Cameron the BBC's licence and public funding, Murdoch drew laughter with his response.

"I wasn’t interested in the BBC licence fee. I'd been through that with previous prime ministers and it didn’t matter what they said. They all hated the BBC and they all gave it whatever they wanted. "

On Tuesday, a cache of emails between James Murdoch and current Tory Culture Secretary Jeremy Hunt was revealed, indicating Hunt had smoothed the way for the takeover by Murdoch interests of BSkyB — which was abandoned after the phone-hacking scandal gathered steam.

Hunt denied behaving improperly, and the British government announced that the special adviser to Hunt, the minister overseeing this summer's Olympics, had resigned over his role in Murdoch's attempted takeover of BSkyB.

Adam Smith said he was resigning because he created a perception that News Corp. had "too close a relationship" with the department for culture, media and sport run by Hunt.

Jeremy Hunt 'followed due process'

In a statement to the House of Commons later Wednesday, Hunt denied any wrongdoing, but he acknowledged that "the volume and tone" of the emails may not have been appropriate.

"Transcripts of conversations and texts published yesterday between my special adviser Adam Smith and a News Corporation representative have been alleged to indicate that there was a back channel through which News Corporation were able to influence my decisions," he said. "This is categorically not the case."

He assured MPs that he hadn't been influenced by News Corp. and indeed had consulted opponents of the purchase as well.

"Throughout, I have strictly followed due process," he told Parliament.

Hunt is also scheduled to appear before the Leveson inquiry, and said he has written to Leveson asking if the appearance can be be made sooner.

Critics of Murdoch's global media empire claim the company's close ties to top U.K. leaders helped boost its business agenda and allowed it to get away with illegal activities for years.

Some allege that Murdoch's influential newspapers helped squeeze favours from loyal politicians. In particular, they argue that Rupert Murdoch's multibillion-dollar bid for the lucrative BSkyB was rubber-stamped by Britain's Conservative Party leaders in return for favourable press coverage.

James Murdoch, showing little emotion, repeatedly denied the charge Tuesday.

Dinners, lunches, breakfasts

"I would never have made that kind of a crass calculation," he testified under oath. "It just wouldn't occur to me."

Murdoch's comments gave a feel for his company's considerable sway, detailing 20-odd dinners, lunches, breakfasts and other meetings with Prime Ministers David Cameron, Gordon Brown and Tony Blair between 2004 and 2010.

James Murdoch was also in close contact with British treasury chief George Osborne — visiting him at his retreat in Buckinghamshire — and Conservative government minister Jeremy Hunt, who once went so far as to describe himself as "a cheerleader for Rupert Murdoch's contribution to British television."

Over four hours of testimony, Murdoch was quizzed about his wide-ranging access to confidential government discussions about his bid for BSkyB in 2011. At the time, News Corp. was lobbying to be allowed to increase its share in BSkyB from around 40 per cent to 100 per cent, a potentially lucrative but sensitive move opposed by many competitors in the media industry.

After the phone hacking scandal broke last July, News Corp. abandoned that bid to take over BSkyB.