Leveson Inquiry: Lib Dems 'warned over BSkyB bid'

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Media captionNick Clegg says he was warned "it would be good for the Lib Dems to be open" to News Corp's BSkyB bid

The Lib Dems were threatened with rough treatment from the Murdoch press if they did not support News Corp's BSkyB takeover bid, Nick Clegg has said.

Lib Dem MP Norman Lamb alerted Mr Clegg to the warning, the deputy PM told the Leveson Inquiry into press ethics.

Mr Clegg said he met Rupert Murdoch twice ahead of the 2010 General Election but exchanged only a few sentences with the News Corp boss.

Scotland's First Minister Alex Salmond also appeared at the inquiry.

Mr Salmond answered questions about his relationship with Mr Murdoch.

News Corp's planned bid to take full ownership of satellite broadcaster BSkyB was dropped in July 2011 following the phone-hacking scandal at the News of the World.

'Quite agitated'

Business Secretary Vince Cable was initially tasked with handling News Corp's bid for BSkyB, launched in June 2010.

But he was replaced in his role by Culture Secretary Jeremy Hunt in the December after he was secretly recorded saying he had "declared war" on Rupert Murdoch.

Mr Clegg told the inquiry Mr Lamb - who was the deputy PM's adviser when Mr Cable was still handling the takeover bid - had been warned "it would be good for the Lib Dems to be open to the bid".

Otherwise the party could expect unfavourable treatment from the Murdoch press, Mr Clegg said.

Mr Lamb was "quite agitated" about that, Mr Clegg said.

"I have to say that, since we hadn't received particularly favourable treatment in the first place, I didn't think it was a hugely credible threat," he said.

At the end of May, Mr Cable told the Leveson Inquiry "veiled threats" were made against the Lib Dems when he was assessing News Corp's takeover attempt.

Mr Cable told the inquiry his party was warned it would be "done over" by the firm's newspapers if he ruled against the bid.

The BBC understands Mr Lamb has written to Lord Leveson about the alleged threats mentioned by Mr Cable and Mr Clegg.

'Fleeting interaction'

Mr Clegg told the inquiry that, at a December 2009 dinner with Mr Murdoch, he sat at the end of the table "where the children sit" and was "an observer".

He said he had "only a very fleeting interaction" with Mr Murdoch before the dinner - attended by "a large number of people" including then-News International chief executive Rebekah Brooks - and said goodbye at the end.

In March 2010, Mr Clegg was in the same building as Mr Murdoch after a lunch with Mrs Brooks and Sun editor Dominic Mohan, he said.

"I exchanged literally a few sentences with him of civilized amicable greetings in a corridor where the lunch was being held."

The deputy prime minister also said Mr Hunt had given a "convincing account" of his handling of the BSkyB bid when he appeared before the inquiry last month.

"I think on the specific point on how he handled the bid to make sure that he was insulated from accusations of allowing personal bias to drive the process, I think he has given a full, good and convincing account to this inquiry."

The BBC's Ross Hawkins said Mr Clegg's "rather convenient" and "rather brief" contacts with Mr Murdoch "stepped him away" from too much involvement with the media tycoon.

He said Mr Clegg would hope others would compare this interaction with the larger number of meetings between Mr Murdoch and Prime Minister David Cameron, who will appear at the Leveson Inquiry on Thursday.

On the issue of press regulation, Mr Clegg described the Press Complaints Commission as "relatively toothless".

But he said he did not want to remove the right of the press to be "ferocious".

Image caption Sir John Major told the inquiry Mr Murdoch urged him to switch policy on Europe

He said he had known News Corp lobbyist Fred Michel, socially and professionally, for more than a decade.

But Mr Clegg said he had not discussed the company's bid to take over broadcaster BSkyB and had not spoken to Mr Michel since a dinner at the house of a mutual acquaintance in September 2010.

Emails between Mr Michel and Culture Secretary Jeremy Hunt's special adviser, Adam Smith, led to Mr Smith resigning.

Mr Smith said the emails over the takeover bid went too far.

Meanwhile, Mr Clegg told his MPs to "stay away" from Wednesday's vote on a Labour bid to have Mr Hunt investigated over his handling of News Corp's BSkyB bid.

Labour's motion in the Commons was eventually defeated by 290 votes to 252, giving a government majority of 38.

Labour accuse Mr Hunt of being too close to News Corp before and during the BSkyB takeover process, in which he was given a "quasi-judicial" role.

During his testimony on Wednesday, Mr Salmond told the inquiry that his bank account was accessed by the Observer newspaper. He also said that, following police investigations in Scotland, to his knowledge his phone had never been hacked.

Responding to Mr Salmond's claim, a spokesman for the Guardian News & Media, which runs the Observer newspaper, said they had "been unable to find any evidence to substantiate the allegation".

The spokesman said Mr Salmond had first raised the matter with the Sunday broadsheet's editor last year.

"As our response to him at the time made clear, we take this allegation very seriously and if he is able to provide us with any more information we will investigate further."

On Tuesday, former prime minister Sir John Major told the inquiry that Mr Murdoch warned him to switch policy on Europe or his papers would not support him.

The third module of the inquiry into press ethics is focusing on the relationship between the press and politicians.

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