DAVID Cameron renewed his backing for Jeremy Hunt last night following revelations the Culture Secretary sent a congratulations message to James Murdoch over his company's controversial BSkyB bid.
Downing Street said Mr Hunt had behaved properly and the Prime Minister would not order an inquiry.
However, Labour accused the embattled minister, whose embarrassing message to the then head of News Corporation emerged at the Leveson Inquiry, of misleading Parliament over how involved he was in the deal.
Chancellor George Osborne is under pressure to give evidence after texts appeared to draw him into the decision to put Mr Hunt in charge of overseeing the bid.
It followed a dramatic day as the extent of Mr Hunt's dealings with the Murdoch media empire were laid bare during his testimony.
At one point Mr Hunt had texted Mr Murdoch to congratulate him on a promotion and joked he would no longer have to deal with Ofcom, the regulator investigating the deal.
The inquiry also heard that, just hours before he was given the role, Mr Hunt texted Mr Murdoch congratulating him on receiving European clearance, adding: "Just Ofcom to go."
Later that day it emerged Business Secretary Vince Cable had told undercover reporters he intended to wage war on the Murdochs.
As Downing Street deliberated over whether to strip Mr Cable of responsibility for the bid, Mr Hunt raised his concerns with the Chancellor that the Government would "screw this up".
The Culture Secretary was reassured he would like the "solution" and was later given overall responsibility for the decision.
Mr Hunt insisted his texts to Mr Murdoch did not reveal bias.
He told the inquiry a quasi-judicial decision did not mean "wiping clean" your brain, but "setting private views aside". And Mr Hunt said rather than help News Corp he had angered them.
Within weeks of his taking charge the company had put together a proposal to hive off Sky News after concerns the takeover could increase News Corp's media dominance.
Mr Hunt said he had made James Murdoch "very cross" when he decided to get advice on the proposal from not one but two regulators.
He added: "From Mr Murdoch's point of view he considered that was tantamount to wanting to kill the deal."
Mr Hunt also told the inquiry he accepted some of his texts with Mr Murdoch had been inappropriate.
However, he said he had decided against offering his resignation as he had knew he had behaved "scrupulously fairly" and could prove it.
His testimony also revealed tensions within the Government. At one point he was warned by an aide not to take calls from Mr Cable amid a warning his LibDem colleague was "trying to be very sneaky over News Corp".
Later, Harriet Harman, Labour's deputy leader, said Mr Hunt was "clearly already biased" when he was handed the quasi-judicial responsibility for the bid. She also accused him of misleading Parliament about his communications with News Corp despite legal advice not to intervene.
There was "no doubt" he had broken the ministerial code and there should be an inquiry, Ms Harman said.
A Downing Street spokesperson said: "Jeremy Hunt's evidence has shown he acted properly while he was responsible for the BSkyB bid. He took independent advice at every turn, as well as a number of decisions which were against News Corporation's wishes.
"As the Permanent Secretary of the department made clear, Jeremy Hunt set up a process which left him with a 'vanishingly small' chance to 'manipulate' the bid for 'political or other ends'.
"There are some lessons to be learned from this process and that's why the Cabinet Secretary has already written to all departments regarding the way quasi-judicial decisions are taken. The Prime Minister will not be referring Jeremy Hunt to Sir Alex Allan (his adviser on the ministerial code)."
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