Analysis: Time on Cameron's side in UK phone-hacking storm

Britain's Prime Minister David Cameron leaves 10 Downing Street in London July 20, 2011. Cameron is to make a statement on phone hacking to parliament on Tuesday.

LONDON (Reuters) - The message from David Cameron's team during this week's truncated trip to Africa was clear: it's time to move on.

For more than two weeks, the normally assured Prime Minister has been at the mercy of events, buffeted by a phone-hacking scandal that brought down a national newspaper and forced the resignation of the country's two most senior police officers as well as Cameron's own head of communications.

In parliament Wednesday Cameron laid out what steps he had taken to deal with the issue and said he regretted hiring a journalist at the center of the storm.

Time is on his side in the short term: parliament is about to disband for the summer, polling shows this issue has not yet shifted substantially -- or permanently -- the public's perceptions of the parties or their leaders, and a police investigation into the scandal is likely to drag on for months.

But longer term, Cameron's decision to hire a former newspaper editor who is suspected of sanctioning illegal phone hacking and police payments could come to define his premiership, sapping away his authority.

"I think there has been a tactical error," said former Liberal Democrat leader Paddy Ashdown, one of those who warned Cameron's office about Coulson. "He would have been better to have admitted that he made a mistake (over Coulson) and then he would have been free to move on. "

PERSPECTIVE

As Cameron rushed through South Africa and Nigeria on a whistle-stop trade tour, aides urged reporters to focus on other issues. "Perspective" was a word that came up repeatedly, and loyalists lined up to repeat that point in parliament on his return.

"Outside the Westminster bubble I'm getting the impression the nation's had its fill on this subject," Conservative MP Tobias Ellwood said.

Despite their bluster, opposition Labor party MPs have little desire to push this to breaking point just yet.

Labor is still struggling to regroup after it was ousted from power last year and does not want to provoke an election as it adjusts to Ed Miliband, a new leader yet to win over the public.

A Labor party backbencher told Reuters Wednesday the party had "a lot of work to do" before it was ready to fight an election. That includes rebuilding depleted fundraising coffers after donors fled the party in droves.

Conservative backbench MPs, many of whom were unhappy that Cameron opted to form a coalition government with the left-of-center Liberal Democrats rather than opting for minority government last year, accept their party's position is also shaky.

Its poll ratings have slipped since coming to power and it lacks an obvious alternative to Cameron, or at least one who might prove as popular with voters.

"We don't know what else there is to come out but I expect him to continue as prime minister for the foreseeable future," said Wyn Grant, professor of politics at Warwick University.

"I'm not sure how far the country is engaged in this issue. It's extraordinary that we have a euro zone crisis going on which could unleash a sovereign debt crisis and a second banking crisis with very serious economic consequences, and very little attention is being paid to that.

"That will be far more important in relation to the next election than these events."

POLLING

While acknowledging its seriousness, Downing Street knows that this issue resonates less with voters than traditional concerns about jobs, welfare, crime and immigration. That gives Team Cameron the confidence to try to shift the narrative.

"We know from other scandals that public opinion tends to bounce back -- this happened after the MPs' expenses scandal," said Helen Cleary of pollsters Ipsos MORI.

"It's also important to remember what is most important in public attitudes toward political leaders. Even now, after (Labor leader) Ed Miliband's boost from the scandal, Cameron is ahead of the opposition leader on personal satisfaction ratings."

A poll by Ipsos MORI for Reuters Wednesday showed Britons' satisfaction with Cameron had hit a record low, but Cleary cautioned that other issues tended to influence voting patterns more.

Westminster observers say that unless it is proved that Cameron knew Coulson had been involved in phone-hacking, the Prime Minister will live to fight another day.

Despite warnings from a newspaper editor and politicians about the potential dangers of hiring Coulson, the Prime Minister maintains he was given no new information during his time in Downing Street to suggest his communications chief knew of the illegal activities undertaken by journalists and investigators at the News of the World.

"Unless there's some revelation lying there that will point the finger at him to show that he's been culpable in all of this -- certainly he did not give the impression today of someone who feels he's under pressure," said Sammy Wilson, an MP with the Democratic Unionist Party, a center-right party based in Northern Ireland, after a statement by Cameron to parliament.

"I don't think, if you listen to the reaction from his own party, that they're in any way trying to distance themselves from him at present."

(Writing by Jodie Ginsberg; Additional reporting by Keith Weir, Mohammed Abbas and Tim Castle)