24 May 2012 Last updated at 15:16 ET

Leveson Inquiry: Hunt memo reveals BSkyB support

Adam Smith on Jeremy Hunt: "He didn't really have that much of a relationship with either of the Murdochs or the chief executive of News International"

Culture Secretary Jeremy Hunt sent a memo to David Cameron voicing support for News Corp's bid for BSkyB before he was put in charge of dealing with it, the Leveson Inquiry has heard.

Mr Hunt said the UK's media sector "would suffer for years" if the deal was blocked, according to the memo.

Number 10 said the memo was "entirely consistent" with Mr Hunt's public view.

But Labour say Mr Hunt was not an "impartial arbiter" on the deal, and that he should resign.

In the memo - written on 19 November 2010, when Business Secretary Vince Cable was in charge of overseeing the BSkyB bid - Mr Hunt said News Corp executive James Murdoch was "furious" about Mr Cable's handling of the matter.

He told the Prime Minister it would be "totally wrong to cave in" to opponents of the deal and said the UK had the chance to "lead the way" if the BSkyB bid went ahead.

Labour deputy leader Harriet Harman said: "It is clear from today's evidence that David Cameron gave responsibility to Jeremy Hunt for deciding on the BSkyB bid when he knew only too well that the Culture Secretary was actively supporting the bid.

"The Prime Minister should never have given him the job."

Quit calls

BBC political editor Nick Robinson said the memo was "ammunition for the culture secretary's critics who say his mind was made up to give the Murdochs what they wanted."

Mr Cable lost responsibility for overseeing the BSkyB bid when his private anti-Murdoch views became public, our correspondent adds.

"Yet now we learn that the man who replaced him, Culture Secretary Jeremy Hunt, had expressed equally strident - albeit pro rather than anti Murdoch - views in private in a draft memo to the prime minister, before he took over responsibility for the bid."

The memo was sent to Mr Hunt's ex-special adviser Adam Smith on 19 November 2010 before it went to Mr Cameron.

Mr Smith resigned in April after saying his emails to and from News Corp lobbyist Fred Michel over the firm's bid to take over BSkyB went too far.

Harriet Harman: "This memo is more evidence that David Cameron should never have appointed Jeremy Hunt to decide on the Murdoch bid"

He said the "content and extent" of his dealings with Mr Michel had not been authorised by the culture secretary.

Downing Street confirmed the prime minister received the memo. But a spokesman said that Mr Hunt had previously said there were no grounds for blocking the deal over competition requirements.

Mr Hunt has resisted Labour calls to quit over claims his relationship with Rupert Murdoch's company was too close, and is due to give his own account of events to the inquiry into media ethics on 31 May.

Mr Hunt's memo - read out at Thursday's inquiry session - expressed concerns that referring the bid to Ofcom could leave the government "on the wrong side of media policy".

Counsel to the inquiry, Robert Jay QC, read from the memo during questioning of Mr Smith.

Mr Jay suggested to Mr Smith that Mr Hunt had drafted the memo and sent it to Mr Smith to check for mistakes.

In his evidence to the inquiry the ex-special adviser said Mr Hunt was not close to News Corporation, and Mr Hunt has denied News Corp had any influence with his office.

Text messages

Earlier, Mr Michel said his dealings with Mr Smith were not "inappropriate".

But he denied government claims he had exaggerated the closeness of his relationship with Mr Smith.

"I think my emails, as they were internal emails, were an accurate account of the conversations I have had," he said.

In his witness statement published by the inquiry, Mr Michel says he did not have "any direct conversation" with Mr Hunt relating to the BSkyB bid beyond his attendance at two formal meetings.

But the statement confirms the men had exchanged numerous text messages, some of which Mr Michel said were "jokey".

Fred Michel said he did not think it wrong to "put arguments or make representations" to Mr Hunt's team

Mr Michel told the inquiry references to conversations with "JH" in his emails with Mr Smith were "shorthand" for the culture department.

Later, he said he believed Mr Smith was representing the culture secretary in the same way he was representing News Corp.

Mr Michel told the inquiry: "I was never of the opinion that it was inappropriate to at least try to put the arguments to or make representations to these officers."

'Buying time'

News Corp unveiled its bid for BSkyB in June 2010 but abandoned it in July 2011 amid outrage over the phone-hacking scandal at its News of the World newspaper.

At the time of the correspondence between Mr Smith and Mr Michel, the culture secretary had been given a "quasi-judicial" role to decide whether the proposed BSkyB purchase should be referred to the Competition Commission for final approval.

Adam Smith and Frederic Michel

• Adam Smith was Culture Secretary Jeremy Hunt's special adviser. He resigned in April after controversy over the content and extent of his contact with News Corporation when the company was bidding for broadcaster BSkyB. He said his "activities at times went too far" and created the perception that the firm "had too close a relationship with the department".
• Frederic Michel is the senior vice-president of government affairs and public policy, Europe, for News Corporation. His email exchanges with Mr Smith were discussed in April during evidence at the Leveson Inquiry. In an earlier written submission to the inquiry he suggested that he never had direct contact with Mr Hunt, despite giving the impressions in emails that he had.

The inquiry heard Mr Michel made 191 telephone calls and sent 158 emails and 799 texts to Mr Hunt's team, 90% of which were were exchanges with Mr Smith.

Mr Jay said Mr Smith sent 257 text messages to Mr Michel between 28 November 2010 and 11 July 2011.

Mr Michel's witness statement revealed in May 2010 both men "bumped into each other" at a London hospital where their wives were about to give birth and "shared a night of anxiety".

But after Mr Hunt was handed responsibility for the BSkyB bid in December 2010, the culture secretary said in a text message exchange that all business contact "now needs to be through official channels until decision made...".

On 3 March 3 2011, Mr Hunt told MPs he was minded to accept the BSkyB takeover after News Corp offered to spin off Sky News. In response to the France-born lobbyist's text that he was "great at the Commons", Mr Hunt replied: "Merci. Large drink tonight!"

Mr Michel contacted Mr Hunt by text message later in March 2011 after his appearance on Andrew Marr's BBC programme to say he had been "very good". Mr Hunt replied: "Merci hopefully when consultation over we can have a coffee like the old days!"

When News Corp withdrew the BSkyB bid, Mr Hunt's response to a text from Mr Michel said "It has been the most challenging time for all of us... would be great to catch up when the dust has settled."

Mr Jay referred to an email in which Mr Michel called on the secretary of state, via Mr Smith, to "show some backbone" and dismiss Ofcom's calls for concessions.

Mr Michel told the inquiry: "It's my English - I might use words in a more melodramatic way than I intended."

Under earlier questioning, Mr Michel agreed Mr Hunt was "keeping an open mind" about the bid but when asked whether he had been supportive of it, he replied: "I can't say."