Lord Mandelson has denied the existence of a deal between Labour and Rupert Murdoch's newspaper empire ahead of the 1997 general election, but admitted former leaders were close to the media mogul.

The former business secretary told the Leveson inquiry on Monday that former prime minister Tony Blair sought to "reassure" The Sun over issues like Europe.

But he insisted there were no pacts made with any media proprietors in order to win their newspapers' support for Labour.

"In my view and from my experience and knowledge of the time, there was no deal, express or implied, between any proprietor and any leading politician for the Labour Party that suggested that in return for that proprietor's support for the Labour Party they could expect some favourable commercial treatment in return," he said.

"I don't believe any such deal happened and I don't believe such a relationship existed."

His insistance that there was no deal was echoed by former Labour culture secretary Tessa Jowell who said she sought assurances from Blair there was no deal with Murdoch.

Lord Mandelson acknowledged that both Blair and his successor Gordon Brown "arguably" became "closer than was wise" to Mr Murdoch.

But he said there was no "Faustian pact".

"As far as the Labour Party is concerned, I do not believe, generally speaking, that the public interest was subordinated to the party's interests in seeking good relations with News International," he said in his written evidence to the inquiry.

"I reject the view that, under either Blair or Brown, some sort of Faustian pact was forged between the government and Rupert Murdoch involving commercial concessions to him in return for support from his newspapers."

He said "the contrary" was the case.

But he went on: "It is also arguably the case, however, that personal relationships between Mr Blair, Mr Brown and Rupert Murdoch became closer than was wise in view of the adverse inference drawn from the number of meetings and contacts they had.

"The same, I am sure, can be said for Cameron and, no doubt, his predecessors."

Lord Mandelson said that while he was a "fully paid up member of the New Labour cause" as it sought to gain the support of the Murdoch press in the run up to the 1997 general election, he thought it sometimes went too far.

"Of course I wasn't comfortable in policy areas in Europe for example - I was a notorious pro-European - I felt the concessiosn we were making in that policy area, at least in rhetoric and tone and language, was perhaps going a tad too far," he said.