Jeremy Hunt sent a text message to James Murdoch congratulating him on the progress of News Corporation's desire to take control of BSkyB on the same day he was appointed to the role of judging the bid.
The Leveson inquiry heard on Thursday that the culture secretary sent a text to Murdoch at 12.57pm on 21 December 2010 saying: "Great and congrats on Brussels. Just Ofcom to go."
The message was in reference to the European Commission's decision that the bid did not breach EU competition rules and that the final hurdle was to get it past the UK media regulator.
On that day business secretary Vince Cable was stripped of the job of impartially adjudicating the bid after he was secretly recorded saying he had declared "war" on Rupert Murdoch.
At around 4pm on that day, after news of Cable's comments became known, Hunt sent a message to George Osborne, he said: "Can we chat about Murdoch’s Sky Bid. I’m seriously worried we might screw this up.
"Just been called by James Murdoch, his lawyers are meeting now and saying it calls into question the legitimacy of the whole process from the beginning. Acute bias."
The chancellor replied at 4.58pm: "I hope you like the solution".
The solution was that Hunt was later that day named as the new secretary of state in charge of judging News Corporation's bid.
Dr Evan Harris
Hunt said it was widely known that he was "sympathetic" to News Corp's bid as he had made several public comments expressing that view.
He defended not informing Downing Street that he had text "congats" to James Murdoch the same day as he did not believe it revealed anything "substantively" different than any of his public comments.
However Robert Jay, the QC questioning Hunt at the inquiry, suggested the message revealed that just as Cable had been accused of being biased against Murdoch, Hunt could be seen to be bias in favour.
But Hunt said once he assumed the quasi-judicial role he acted impartially. "You don't appoint a quasi-judicial role with your brain wiped clean."
Hunt said his special adviser Adam Smith, who resigned following revelations of his close contacts with News Corp lobbyist Fred Michel during the bid process, had not been given any specific instructions about how to act as the "official point of contact".
"I do not think he was given any express instructions," he told the inquiry, but he had attended meetings that should have left him aware of the requirements of the quasi-judicial process.
"He was present at all the meetings where we had advice from lawyers and officials.
"He heard, as I heard, all the things we needed to be careful about."
Hunt said he believed his six-year professional relationship with Smith was as close or closer than any between a minister and special adviser in Whitehall.
"It was a given that he knew what I thought on certain issues," he said.
But he insisted that he had not considered him to be acting as a spokesman for him in discussions with Mr Michel.
Feedback from Smith was characterised in the lobbyist's emails to his bosses as coming from the Secretary of State himself.
"I did not see Mr Smith as being someone who was telling me what News Corp thought or telling News Corp what I thought," Mr Hunt told the inquiry.
"I saw him as an official point of contact in the process. Someone News Corp could contact if they had concerns."
Asked for his personal opinion of the bid prior to taking responsibility, Hunt said: "I was sympathetic to the bid. I hesitate to say supportive."
But he issued a staunch defence of his ability to "set aside any views you have" in taking the quasi-judicial decisions - and insisted his actions backed that up.
"My suitability for the role is demonstrated by the actions I took when I did take responsibility for the role because I believe I did totally set aside all those sympathies."
He went as far as to "set up a process explicitly to make sure" that happened, he added.
Hunt also defended his continued social contacts with media figures during that period.
"I did not interpret my role to mean all social relations were suspended with everyone associated with the bid," he said, suggesting it was fine to chat to someone he bumped into in a lift or to give a "courteous reply to a text message".
What The Other Witnesses Have Said
DCMS Permanent Secretary Jonathan Stephens: Hunt Urged Cameron To Back News Corp Bid
Ken Clarke: The Press Is More Powerful Than Parliament
Michael Gove: Rupert Murdoch Is A 'Impressive And Significant' Man
Tony Blair: I Chose Not To Take On The Press
Jeremy Hunt says he considered his position after the Fred Michael claims first emerged, but decided it would be inappropriate for him to quit.
He tells Leveson that the claim from Michel that Hunt didn't want the bid to go to the competition commission because it would "kill the deal" was nonsense and wasn't his private thinking.
Hunt says his actions with regard to the deal suggest the exact opposite - he was prepared to let the Competition Commission weigh in, if necessary.
Hunt says he wished he'd "spelt out" in terms to Adam Smith that he had to be careful when dealing with News Corp, and also wishes that Smith had revealed the pressure he was coming under from Fred Michel.
Hunt says that Smith "broadly understood" the role he was playing as special adviser to the man making the quasi-judicial decision, but says Smith came under a "barrage" from News Corp, and that caused the problem.
Hunt says Smith did not give News Corp "Any substantive help", but says under constant pressure and a bombardment of messages from Fred Michel, Smith's language occasionally strayed into improper territory.
When James Murdoch was promoted to a position in News Corporation's New York Office Hunt sent him a "tongue in cheek" text message.
"I am sure you will really miss Ofcom in New York," he said.
Hunt says he was "pulling his leg" that in New York Murdoch would be away from Ofcom, which he hated.
Hunt planned to go for a drink with Andy Coulson after the former News of the World editor resigned his post in Downing Street.
His adviser, Sue Beeby, told him that it would not be wise to meet Coulson until the BSkyB process was complete.
Leveson hears of Hunt's reaction when he heard Rebekah Brooks resigned from News International in the wake of the phone hacking scandal.
He sent a text to Smith reading: "About bloody time".
Hunt says Smith is the "most decent straight most honourable person one could imagine".
He tells Leveson that he did not realise how Michel's 'cheeky persistence' in contacting himself and Smith would affect his adviser.
Smith was asked to resign his position after being deemed to have had inappropriate levels of contact with Michel.
Hunt is listening to messages that were sent between himself and News Corp lobbyist Fred Michel.
The culture secretary describes Michel as "cheeky" in the tone and frequency with which Michel talked to him.
Hunt is back up after a lunch break. He is being asked about what the atmosphere was like in the wake of the Milly Dowler phone hacking revelations.
Hunt says Downing Street was worried that Labour would win a vote on the issue in the Commons.
"Number 10 are getting worried that the phone hacking issue is getting big, they wanted to be sure the public would undesrtand that we couldn't link the two issues [hacking and BSkyB]," he says.
Hunt has some nice words for his former adviser, Adam Smith.
He says he was a "uncomplaining, decent, hard working person". Still told him to resign though.
Hunt is asked about the revelation that News Corporation was given advance notice of a statement he made to parliament about the bid.
The culture secretary says there was nothing wrong with this.
"It is standard practise when you make an announcement to parliament [about a company] that they do have notice in advance," he says.
Again, Hunt seems more at ease now the focus has moved onto phone hacking.
He tells the inquiry that the only way the phone hacking scandal would affect News Corp's bid to take over BSkyB would be if there was an issue of trust.
"You had to be confident you could trust the people you were doing a deal with," he says.
He says the closure of the News of the World was a "very, very significant moment" for him as it suggested there might be a management issue.
"Is this a company that doesn't have control of what is going on in its own company?" he asked himself.
Jeremy Hunt is sounding more confident now as he explains how he stood up to James Murdoch over the terms News Corp would be able to take over BSkyB.
One of the changes made, he says, would have been that Sky News would have become "massively more independent" of the Murdochs.
Hunt says he was surprised at how many texts and phone calls Michel sent to Smith during the bid.
But Hunt says Smith's role was "to keep News Int on board with the fairness of the process," and says.
Jeremy Hunt claims that Smith should not have needed to have been told expressly that he was not a spokesman for the Culture secretary.
"I doubt there is a minister who worked more closely with is special adviser," claims Hunt, saying he and Smith were close colleagues for six years.
However he says this is not to assume that Smith was Hunt's mouthpiece.
Hunt suggests that Smith could and should have know what he should or shouldn't do without needing to be told.
Robert Jay suggests that contact between News Int and Smith amounted to the same thing as contact with News Int as hunt.
Jeremy Hunt says this is not the case and says Smith's role was to "reassure them that the process was fair."
Hunt says Smith was present at all meetings where Hunt was taking legal and official advice. It was "understood he would be a point of contact."
Hunt is on thin ice here. He says he wouldn't have sent the 'Congrats on Brussels, just Ofcom to go' text to James Murdoch, had he already been appointed as the person in charge of judging the BSkyB bid.
However Hunt has already indicated he thought he might get that role.
In a text message between the chancellor and Jeremy Hunt, the latter worries the BskyBid was not being conducted fairly under Vince Cable.
Osborne replies "I think you will like the solution", indicating the solution was that Hunt would takeover the BskyBid.
Hunt says he had a reasonably good idea this would happen before he received that text.
In a message from Jeremy Hunt to James Murdoch when it became clear Europe would not block the BSkyB takeover.
|@ benfenton : [Sharp intakes of breath in the press room as Hunt admits he didn't understand a key part of the bid process.] #leveson|
Robert Jay reads out a draft of a memo from Hunt to the PM. Hunt acknowledges that he drafted it himself.
Jay notes that Hunt initially wrote that Vince Cable's decision to refer the bid to Ofcom might "put us in the wrong place, not just politically."
Hunt says he took out "not just politically" from the final draft, but that it suggests the Tories were free-market and anti-bureaucracy. "The approach the government was taking felt inconsistent with that."
Robert Jay says the call between Hunt and Murdoch was "successful" because some reassurance was given by Jeremy Hunt.
"I wouldn't have given any reassurance... that was something I coudn't get involved with," Hunt insiststs.
"I probably gave him a sympathetic hearing," says Hunt.
Robert Jay suggests a contact from Fred Michel where he says he will "continue to send helpful arguments" through Adam Smith, and which was acknowledged by Jeremy Hunt, suggests that Hunt new Smith and Michel were in fairly constant dialogue.
Hunt agrees this is correct, but says Smith was his conduit to most external stakeholders.
Hunt says as long as officials were present and it was made clear, that he couldn't intervene on a matter being handled by Vince Cable, there seemed no reason for him to not meet James Murdoch.
Hunt says he had a phone conversation with James Murdoch, where the latter vented about how annoyed News Corp was.
Robert Jay QC suggests this amounts to the same thing has having a meeting.
Jeremy Hunt says Murdoch was using "colourful language" on the phone.
Hunt is asked whether he was frustrated that the bid was having trouble under Cable. Hunt says he might have been.
He says he did so because he thought he shouldn't get involved with the process as Vince Cable was overseeing it.
Someone in the DCMS department - not Jeremy Hunt - told News International that the legal advice was that the meeting could prejudice the judicial process.
Robert Jay QC suggests this person was special adviser Adam Smith. Jeremy Hunt says "It's possible that that's something they would have to say happened or not."
Clearly the two men weren't speaking when they attended Cabinet every Tuesday.
Hunt says he was "concerned" that the BSkyB bid - which he broadly supported - was encountering difficulties with Cable.
By a freak coincidence their babies were born at the same time and in the same hospital, which is how they got to know one another. But they never socialised together, their families never socialised together