Jeremy Hunt has admitted he considered quitting the cabinet amid allegations he mishandled News Corporation's bid to take over BSkyB, but decided to let his special adviser resign instead.
Giving evidence to the Leveson inquiry on Thursday, the culture secretary said he told Adam Smith he had to go with a "very heavy heart".
"I did think about my own position," he said. "But I had conducted the bid scrupulously fairly throughout every stage, and I believed it was possible to demonstrate that I decided it wouldn't be appropriate for me to go."
Throughout his evidence to the inquiry Hunt spoke highly of his former adviser, describing him variously as "honorable", "brilliant" and "diligent".
Hunt said Smith, with whom he had worked for almost six years, as the "most decent straight most honourable person one could imagine".
However the culture secretary said his ex-adviser had over-stepped the line in his contact with News Corporation's chief lobbyist and had made "inappropriate" comments.
Smith told Leveson last week that after the internal News Corp emails emerged that suggested he had given the company inappropriate levels of information he offered Hunt his resignation.
He said that the culture secretary told him it would "not come to that" as he had only been doing his job.
But the following day after holding other meetings at which Smith was not present Hunt told him that he had to quit as "everyone here thinks you need to go".
Smith said he resigned not because had behaved inappropriately but because of a "perception" in the media and public mind that he "something untoward had gone on".
Hunt confirmed Smith's account of the meeting at which he was told to quit but said he himself was not one of the people included in the term "everyone".
"I'd come in early that morning, there was obviously a big storm going on, and Adam Smith had offered to resign if that became necessary and it was still very much my hope it wouldn't come to that.
"I personally found the whole thing incredibly difficult," Hunt said. "This is a men I had been working incredibly closely with for nearly six years."
"It seemed terribly unfair, the pressure was such it did seem it was inevitable."
During his evidence to the inquiry on Thursday that Hunt sent a supportive message to James Murdoch just hours before he was appointed to the role of overseeing the BSkyB bid, calling into question how impartial he could have been.
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
Dr Evan Harris
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