* PM says does not regret giving role to Jeremy Hunt
* Says Murdochs, and he, deny conspiracy to do deal
By Kate Holton
LONDON, May 25 (Reuters) - British Prime Minister David Cameron rejected calls to fire his Culture Minister on Friday after a public inquiry heard how the minister had ignored warnings from staff to lend his support to a major Rupert Murdoch takeover deal.
Appearing on a morning television show more commonly known for light-hearted issues, Cameron was tackled on his judgment in appointing a minister to rule on News Corp’s bid for BSkyB who he already knew supported the deal.
The ultimately aborted takeover has become a key issue in the long-running controversy in Britain over whether Murdoch and his newspaper executives have undue influence, with the government accused by critics of trying to bend the rules to steer the deal through.
The minister in question, Jeremy Hunt, previously had sent a memo to Cameron detailing his view that the takeover would be good for Britain. A month later Cameron put Hunt in charge of deciding whether to approve the deal.
Evidence revealed at a public inquiry has since shown that an adviser to Hunt built up a close relationship with a lobbyist at Murdoch’s company during the regulatory process, providing highly sensitive details on a regular basis as Hunt worked with regulators to approve the deal.
A senior civil servant at Hunt’s department told the inquiry on Friday that he had warned the minister that the takeover was a “boiling hot potato” which should be treated very carefully, with no informal links forged with News Corp.
“I don’t regret giving the job to Jeremy Hunt,” Cameron said on television. “The crucial point, the really crucial point, is did Jeremy Hunt carry out his role properly with respect to BSkyB and I believe that he did.”
Critics say Cameron assiduously courted figures at Murdoch’s company and particularly its British newspaper arm News International as part of his drive to become Prime Minister.
He has since been embarrassed by a series of revelations shedding light on the close ties, including the details of weekend gatherings with Murdoch family members and executives at their respective country homes.
“Some people are saying there was some great conspiracy between me and Rupert Murdoch to do some big deal to back them in return for support,” Cameron said. “Rupert Murdoch has said that’s not true, James Murdoch has said that’s not true, I have said that’s not true. There was no great conspiracy.”
Tony Blair, a former British prime minister criticised for his close ties to Murdoch when in office, will appear before the Leveson inquiry into press standards on Monday.
Murdoch eventually had to ditch the planned takeover amid public outcry over phone-hacking by journalists at his Sunday tabloid, the News of the World. But the impression that the government sought to steer the deal through on behalf of Murdoch poses problems for Cameron.
The adviser to Hunt, 30-year-old Adam Smith, appeared at the Leveson inquiry for a second day on Friday to give evidence, saying that Hunt and his office had known about his contacts with News Corp throughout the process.
Smith resigned in April after the evidence came to light. He initially had been reassured by Hunt that he would not have to go because he had just “been doing his job”, but the minister changed his mind hours later after discussing the issue with other senior staff.
“The perception had been created that something untoward had gone on,” he said. Critics including the opposition Labour party have called for Hunt to quit, accusing him of breaking the rules and then blaming his aide Smith to protect his own career.
Hunt will appear before the inquiry next Thursday. Meanwhile police investigating allegations of phone-hacking and illegal payments to public officials by journalists arrested a 37-year-old woman on Friday on suspicion of bribery and corruption offences.
News International confirmed the woman was a current employee but did not name her or say for which publication she worked.