Press tycoon Rupert Murdoch's son got regular confidential updates from the British government over News Corp.'s bid for full control of pay-TV giant BSkyB, a press ethics inquiry heard Tuesday.
A string of emails from the Murdochs' media empire, read out in a dramatic day of evidence at the Leveson inquiry, revealed the closeness and frequency of News Corporation's contacts with advisors to culture minister Jeremy Hunt.
James Murdoch, a top News Corp. executive, denied that Hunt had been an active "cheerleader" within government for the now-abandoned takeover bid.
News Corp. was forced to drop its attempt to take control of the highly profitable BSkyB in July after its British newspaper wing was engulfed by a phone-hacking scandal at the News of the World tabloid.
But it would have been Hunt's role to make a quasi-judicial decision on whether to allow the deal to go through, although his remit was purely to examine whether it threatened plurality in the media.
James Murdoch admitted he had discussed the proposed takeover at a 2010 Christmas party with David Cameron -- though the prime minister has previously denied having had an "inappropriate conversation" with him about the bid.
Earlier this month, James Murdoch quit as chairman of BSkyB, the British television giant in which his father's News Corp. held a 39-percent stake.
He remains however deputy chief operating officer of the US-based News Corp.
As the string of emails was aired, bookmakers stopped taking bets on whether Hunt would be forced to resign as demanded by Ed Miliband, leader of the opposition Labour Party.
"I myself have said all politicians, including Labour, became too close to the Murdochs but this is in a completely different league," Miliband said.
But Cameron's spokesman insisted the prime minister continued to have full confidence in Hunt, whose remit also includes being the lead minister during the 2012 London Olympics.
Hunt later said he had acted with "scrupulous fairness" and said he had written to Leveson asking for an early appearance before the inquiry "to resolve this issue as soon as possible."
In his statement, Hunt claimed some of the meetings mentioned in the emails "simply didn't happen" and that he had followed the advice of independent regulators throughout the process.
He also accused his critics of "jumping on the political bandwagon".
The early editions of Wednesday's papers turned the screw on the government, with The Guardian, which uncovered much of the hacking scandal, running with the headline "Minister for Murdoch".
The Financial Times carried "Murdochs turn tables on Cameron and Hunt" on its front page, the Independent "Murdochs take revenge", focussing on the media empire's fightback against the government's perceived attempts to make it a scapegoat.
James Murdoch was grilled about his family's links to politicians as he gave evidence under oath at the inquiry, which was set up in the wake of the hacking scandal.
His father, Rupert Murdoch, was to give evidence to the inquiry on Wednesday and Thursday.
His 39-year-old son admitted that he and the prime minister talked about the bid for BSkyB at the December 2010 party.
"It was a tiny side conversation ahead of a dinner where all these people were there," Murdoch told the inquiry.
When asked in parliament last year whether Cameron had discussed BSkyB at the party, Cameron said he had "never had one inappropriate conversation."
James Murdoch revealed that he had a total of 12 meetings with Cameron before his Conservative Party came to power in a coalition government following the May 2010 general election.
He said News Corp executives, including himself, had held numerous meetings with ministers during the company's bid to take full control of BSkyB.
In a day-long session, James Murdoch was also quizzed about his stewardship of News International, News Corp's newspaper wing which published the News of the World.
Murdoch denied that the News International tabloid The Sun, Britain's biggest-selling newspaper, had backed the Conservative in the 2010 general election to advance the BSkyB bid.
"I would never have made that kind of a crass calculation about what the newspapers did," he said.
He admitted he was "friendly" with Britain's finance minister George Osborne and had discussed the bid with him informally on at least one occasion.
The News of the World was closed in July amid a storm of revelations that it illegally accessed the voicemail messages of a murdered teenage girl and the families of dead soldiers.
James Murdoch quit as News International's executive chairman in February.