UK's Cameron to face inquiry over Murdoch ties

By Kate Holton

LONDON (Reuters) - British Prime Minister David Cameron and his finance minister George Osborne will face accusations they bent government policy to support media baron Rupert Murdoch when they appear at a high-profile inquiry into press ethics next week.

The two most senior members of the government will appear in courtroom 73 at the Royal Courts of Justice in what is certain to be another dramatic week for an inquiry that has revealed collusion between politicians and the Murdoch media empire.

Former prime ministers Gordon Brown and John Major will also testify, along with Labour leader Ed Miliband, deputy Labour leader Harriet Harman and Nick Clegg, the head of the Liberal Democrat junior party in the government coalition.

The scandal has damaged Cameron by creating an image of a leader who surrounded himself by a small clique of wealthy members of the media elite promoting their own interests.

Evidence showing some big government decisions being handled via text messages and how one minister hid behind a tree to avoid being seen with Murdoch executives has also proved unedifying.

The former tabloid editor Rebekah Brooks revealed how Cameron signed off text messages to her with an affectionate "LOL", conjuring the embarrassing image of a prime minister-in-waiting fawning over the Murdoch protegee.

"This inquiry has thrown up an image that is worse than incompetence, it's revealed a shadiness of operation and a sense of desperation in the willingness not just to cuddle up to this major media baron but to hide the footsteps too," said Stephen Barnett, a communications professor at Westminster University.

The witnesses will be asked about their ties to Murdoch and how far they went in courting the Australian-born media tycoon to win the backing of his newspapers.

One aspect that has become central to the inquiry is how Cameron's government handled a $12 billion bid by Murdoch's News Corp to buy the rest of the lucrative pay-TV group BSkyB that it did not already own.

The inquiry has heard evidence that appears to show ministers working behind the scenes to support the bid.

DECLARED WAR

Cameron will be asked why he selected Media Secretary Jeremy Hunt to decide whether to approve Murdoch's BSkyB bid when he knew Hunt supported the takeover.

Hunt also contacted Osborne to gain his support for the takeover in 2010, after the minister who, until then, had been in charge of the bid told undercover reporters that he had "declared war" on Murdoch.

Cameron will also be asked about his decision to appoint a former editor of Murdoch's now defunct best-selling Sunday tabloid, the News of the World, to be his chief spokesman.

Critics say Cameron's appointment of Andy Coulson showed a lack of judgement as the journalist was closely linked to a paper under suspicion of obtaining stories by illegal means - the original spark for the media scandal.

Osborne had originally intended to submit his evidence to the inquiry in a written statement but was called to appear before the judge, Lord Justice Leveson, after his name increasingly cropped up in excahnges about how the government handled its relationship with Murdoch.

His increasing association with the scandal is a concern for Cameron as Osborne is in charge of the government's political strategy.

The most worrying witness for Murdoch could be former Prime Minister Gordon Brown, who clashed with the media tycoon after his daily tabloid The Sun switched its support away from Brown's Labour party to Cameron's Conservatives.

Murdoch told the inquiry in April that Brown had threatened to "make war" on News Corp over the switch of allegiance, something Brown denied.

Like the current Conservative-led government, Labour has been accused of getting too close to Murdoch, for political advantage, for years.

Brown is likely to be asked about his recollection of a 2006 front-page Sun splash revealing that his four-month old son Fraser had cystic fibrosis. Brooks, the then editor of the Sun, told the inquiry that Brown had not objected to the story being published, which again Brown has denied.

Brown and Osborne will appear on Monday, Major, Miliband and Harman on Tuesday, Clegg on Wednesday and Cameron on Thursday. Alex Salmond, who is leading the push for Scottish independence, also appears on Wednesday.

(Editing by Robin Pomeroy)