Highlights: Rupert Murdoch before UK media inquiry for 2nd day

LONDON (Reuters) - Rupert Murdoch appeared on Thursday before an inquiry delving into the power he wields over politicians and police and how far it resulted in a culture where phones could be hacked by his journalists and rules routinely broken.

Following are key quotes from Murdoch's second day of testimony:

ON COVER UP CULTURE

Asked where the culture of cover-up emanates from: "I think from within the News of the World and there were one or two very strong characters there who I think had been there many, many years and were friends of the journalists - the person I'm thinking of was a friend of the journalists and a drinking pal and clever lawyer and forbade them ... to report to Mrs (Rebekah) Brooks or to James (Murdoch). That's not to excuse on our behalf at all. I take it extremely seriously that that situation had arisen."

ON RELATIONSHIP WITH EDITORS OF HIS PAPERS

"Certainly I don't flinch from my responsibilities and I certainly do take part in the policy decisions of The Sun (newspaper). I think that is my job."

"They may know my thinking but they don't have to agree with it. We can have very vigorous discussions."

ON HOW THE SUN REFLECTS HIS OPINION

"I don't say it's absolutely parallel in every detail, it's not, but generally speaking the issues that we get interested in, that we fight for, you'll find them in The Sun and you'd find that I would agree with most of them, if not all of them."

ON BSKYB DEAL

"I never saw anything wrong with what we were doing. It was a commonplace transaction - a large one but a commonplace one. So why would I be worried about the politics of it?"

Asked about the extent to which his son James kept him up to date on the bid's progress: "I don't remember any conversation to be honest with you but I'm assuming that he kept me up to date to some extent. I delegated the situation to him, I left it to him."

ON CONVERSATION WITH THEN PRIME MINISTER GORDON BROWN

"As for the other conversation, which (Gordon Brown) has denied, I said that very carefully yesterday under oath and I stand by every word of it.

"Lord Mandelson, who was then a pretty senior member of the Cabinet, charged News International with having done a deal with Cameron ... Lord Mandelson said he did this under order from Mr Brown knowing it to be false. That's in his own autobiography, that he reluctantly went out and did what he was told. I think that just reflects on Mr Brown's state of mind at the time."

(Reporting by Paul Hoskins, Drazen Jorgic and Georgina Prodhan; Editing by Rosalba O'Brien)