Jeremy Hunt was under mounting pressure last night after his most senior civil servant appeared to undermine the Culture Secretary's version of events surrounding the secret briefing of News Corp during its attempted £8 billion takeover of the satellite broadcaster BSkyB.
Jonathan Stephens, the Permanent Secretary at the Department for Culture, Media and Sport, refused 10 times to confirm that he "agreed" to let Mr Hunt's special adviser, Adam Smith, speak to Rupert Murdoch executives about the deal – as Mr Hunt claimed in Parliament as he battled to keep his job. The revelation adds to Labour Party suspicions that Mr Hunt may have overruled his Permanent Secretary to insist on a role for Mr Smith, who on Wednesday resigned over the affair, in the takeover talks. Mr Stephens repeatedly dodged the questions from MPs on the Commons Public Accounts Committee, to their clear irritation.
Last night, the Department of Culture, Media and Sport issued a statement saying Mr Stephens was "aware" of the arrangement and was "content" with it – but the statement did not explicitly say he had agreed to it or authorised it.
In a further day of dramatic developments, it also emerged that:
* Downing Street has gone to extraordinary efforts behind the scenes to prevent an independent inquiry into whether Mr Hunt broke ministerial codes of conduct. The Cabinet Secretary made a private telephone call to Lord Justice Leveson within hours of the scandal breaking on Tuesday to lobby for Mr Hunt's case to be heard as part of the inquiry, allowing Mr Hunt to avoid facing an investigation into whether he has broken the ministerial code of conduct;
* The broadcasting regulator Ofcom has escalated its inquiry into whether BSkyB is a "fit and proper" owner of a broadcasting licence. Ofcom has asked for documentary evidence relating to the phone-hacking scandal and could force Mr Murdoch to sell his existing stake in BSkyB. The Financial Services Authority is already considering an investigation into the alleged leaking of financially sensitive information;
* Rupert Murdoch was accused by the News of the World's lawyer Tom Crone of making a "shameful lie" in his evidence to the Leveson Inquiry. Mr Murdoch had suggested that Mr Crone was involved in hiding the extent of the hacking scandal from senior executives.
In an attempt to increase pressure on the Government, Labour wrote to Mr Stephens last night asking the Permanent Secretary to confirm in writing that he "knew in advance" that Mr Smith was to be a contact point with News Corp, and also to confirm that he had approved the arrangement in advance.
The deputy Labour leader, Harriet Harman, also called for the publication of all text messages, emails and phone records between Mr Smith and the News Corp lobbyist Fréd Michel relating to the BSkyB bid, and called for an inquiry into whether Mr Hunt broke the Ministerial Code.
She also demanded the publication of messages between Mr Hunt and his special adviser Mr Smith. Sources who know both men told The Independent they found it "inconceivable" that Mr Smith would have acted without Mr Hunt's explicit authorisation in his dealings with Mr Michel.
The Cabinet Office confirmed that the Cabinet Secretary, Sir Jeremy Heywood, had privately contacted Lord Justice Leveson on Tuesday to say the Government would like Mr Hunt's case to be heard as part of his inquiry. This triggered accusations that the Government's most senior civil servant had tried to interfere with the inquiry.
No 10 was forced to admit that the Leveson Inquiry had no remit to rule on whether Mr Hunt broke the code, or to make recommendations on whether he should remain in office. Downing Street also refused to give any undertaking to voluntarily supply the inquiry with all emails, text messages and calls between Mr Hunt and Mr Smith relating to the BSkyB takeover.
The senior Tory MP Bernard Jenkin, chairman of the Public Administration Committee, suggested he was unhappy with the Government's handling of the situation when he said the Prime Minister's independent adviser on the Ministerial Code, Sir Alex Allan, should conduct "swift preliminary enquiries" to see if the Culture Secretary had a case to answer. Mr Jenkin said: "I think it is extraordinary that any special adviser should have anything at all to do with a Secretary of State's quasi-judicial role in a matter such as a takeover bid and whether to refer that takeover bid."
Later in the day, the department tried to clarify Mr Stephens's stonewalling and failure to provide a clear answer to MPs. It said in a statement: "The Permanent Secretary did not feel it was appropriate to provide further information ahead of the department's evidence to the Leveson Inquiry. As Jeremy Hunt's statement yesterday made clear, the Permanent Secretary was aware that Adam Smith was amongst a small number of individuals in the department who were in contact with News Corp and was content with that arrangement."
David Cameron's official spokesman said the Prime Minister still had no intention of asking Sir Alex to launch an investigation into the Culture Secretary's conduct. "He has not done," said the spokesman, adding: "He has no plans to do so."
The spokesman added: "The Prime Minister has made very clear that he believes the Secretary of State acted properly. There is an inquiry ongoing that is looking at some of these issues and we should let that inquiry take its course."
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