This week much of the attention focussed on someone who has not yet given evidence – culture secretary Jeremy Hunt. His former special adviser – Adam Smith – and News Corporation lobbyist Frederic Michel gave evidence to the Leveson Inquiry, over allegations Smith acted as a backchannel to Rupert Murdoch’s company during the BSkyB bid.  The Inquiry also heard from Jonathan Stephens, the Permanent Secretary at the Department of Culture Media and Sport.

Before these issues were the first part of the week was devoted to the evidence of a number of  Labour and Conservative politicians, many of whom have been responsible for media policy.

On Monday morning, the inquiry heard from former culture secretary Tessa Jowell, who denied failing to help police with phone hacking prosecutions. She said police informed her voicemail messages had been illegally intercepted in 2006, when she was on holiday with family and friends, and her “offers of further help were declined”.

Previously the Inquiry had heard that Jowell had resisted helping officers with prosecuting private investigator Glenn Mulcaire and News of the World royal editor Clive Goodman. In February, DCS Keith Surtees, an investigating officer on Operation Caryatid, said in a witness statement: “One of these victims was Tessa Jowell. All of the potential victims declined to assist us with the prosecution.”  Jowell told the inquiry:

“I was a Secretary of State and a privy councillor. It would have been absolutely incumbent on me, were I asked to cooperate with an inquiry, to agree to. My principal private secretary, who is a civil servant, confirmed my willingness to help.  I was deeply shocked when I read Keith Surtees’ evidence, because it is completely untrue. And I completely understand that his memory may be faulty and I think that the way the transcript reads seems to imply a lack of accuracy in his recollection, but I would want the inquiry to be absolutely clear that had I been asked at that time to provide a witness statement, I would have provided it.”

Pressed by Neil Garnham QC, acting for the Metropolitan Police, the MP said she had been shocked and upset by the information but had asked what she could do to help with the investigation.

Jowell said she did not realise her phone had been hacked before the police contacted her, but admitted she “adopted a permanent stance as if you are being followed, as if someone is watching or listening” after a series of intimate stories appeared in the press.  She said the Daily Mail, the Evening Standard and the Sunday Times were among papers who printed these articles and promised to submit examples to the inquiry.

She added: “It was as if my closest friends had simply rung up the newspapers and said this is what she is thinking.”

In the afternoon hearing, Lord Mandelson has denied a “Faustian pact” between the Labour government and Rupert Murdoch. In his written statement to the inquiry, he said:

“I reject the view that, under either Mr Blair or Mr Brown, some sort of Faustian pact was forged between the government and Rupert Murdoch involving commercial concessions to him in return for support from his newspapers.”

He told the inquiry during his oral evidence that Labour welcomed the support of Murdoch’s papers but did not make concessions to his commercial interests. He went on to criticise David Cameron for making a “deliberate” attack on broadcast regulator Ofcom “which News International wanted to see swept off the board”.

Mandelson said he declined a dinner invitation from Murdoch in 2010 but agreed to meet him to discuss claims the Labour government had “declared war” on News Corporation. He added:

“I don’t think there’s any great secret that the government and the Prime Minister were unhappy that after all those years of support of the Sun, the Sun was now gunning for us. [Murdoch] was quite agitated, as he put it, that the government had declared war on his company.  It’s not something I would have sought or wished for but there we are. They had decided to withdraw their support.”

Mandelson said police had told him the Daily Mirror commissioned private investigator Jonathan Rees – of Southern Investigations – to obtain information on him. His bank account had been targeted, along with details about his brother and surveillance of his elderly mother. Piers Morgan was editor of the newspaper in 1999, when four invoices in relation to Lord Mandelson were sent to the newspaper.

The former business secretary later accused former Met officer John Yates of leaking information about the cash-for-honours investigation to the press, saying he heard first-hand from journalists that the former assistant commissioner personally called them.  When questioned by Neil Garnham QC, representing the Met, Mandelson said he would not have made the comments if there were “no foundation”.  He added: “[Journalists] were as surprised as anyone to find themselves on the phone to AC Yates.”

Mandelson provided the inquiry with a letter sent to him by Yates – described as “bullying” – attacking him over the claims. He criticised Culture Secretary Jeremy Hunt for not stopping “inappropriate contact” between his special advisor Adam Smith and News Corp lobbyist Frederic Michel.  He added:

“What on earth was a temporary civil servant, a special adviser to a secretary of state, doing texting like that and exchanging messages and information with a corporate lobbyist? If they’d have been in the Department for Business they would have been taken out and shot, in fact they would not have got to that stage.”

Mandelson advised the inquiry to “approach some of the communications that took place with scepticism” after admitting Michel used to work for the think-tank he chairs. He added:

“I don’t want to mislead you, but I am in a difficult position. All I would say is that he was perhaps better at networking than he was dealing with policies. He was better over people than he was on policies. Perhaps he might have been better suited to public relations than lobbying.”

On Tuesday morning, the inquiry heard evidence from Tom Watson MP, who alleged former News of the World reporter Mazher Mahmood commissioned a private investigator to stalk him at a Labour Party conference.

Watson said Mahmood – known as the ‘Fake Sheikh – hired Derek Webb to trail him in 2009, to establish whether he was having an affair. He said emails between Mahmood and news editors Ian Edmondson and James Mellor described information he says is untrue. The MP – who sat on the Culture, Media and Sport select committee examining phone hacking at the News of the World – claims News International had a vendetta against him after he spoke out against the company.

Asked why it had taken so long for politicians to “wake up” to hacking, Watson said some had “closed their minds” to the allegations. He said:

“I think they closed their minds to the potential for a major scandal at one of their key outlets for their message, and I think the personal relations between politicians and people at the company were too fibrous and close so that they couldn’t divorce their objective thinking. And I think they were frightened.”

Watson said Labour MP Martin Salter was subjected to several invasions of privacy after he opposed the Sarah’s Law campaign run in the News of the World, going on to say MPs feared ridicule or humiliation in the press in relation to their private lives or professional mistakes.  He added:

“There was a sense that there was a mystique about the News International stable, that they had unique access to Downing Street and for a minister that was important, and the way you were portrayed in the News International papers was important and they factored that into their thinking.”

Rhodri Davies QC, acting for News International, said there was no evidence any members of the select committee other than Watson had been placed under surveillance by the News of the World.

Former home secretary Alan Johnson MP accused the Metropolitan Police of being “lethargic” in responding to phone hacking allegations.  He said he was “naively reassured” by John Yates that the original phone hacking investigation had been properly reviewed by police in 2009. Johnson said he believed the Met were involved in an ongoing process to inform potential victims of hacking – including politicians John Prescott and Tessa Jowell – after Yates conducted a day-long review of Operation Caryatid.

In 2011 he called the Met “either evasive, dishonest or lethargic” over the investigation and said he stood by the statement. At the time of Yates’ review, Johnson was advised not to refer the investigation to the HMIC and defended his decision to the inquiry.  He said:

“If you’re thinking of calling in the HMIC to investigate the police… you would always been relying to a large extent on the advice you’re receiving from the police as to why they are pursing this properly and why there is no reason to call anyone in to independently examine what they doing. They would of course be offended by a Home Secretary calling in independent people to look at how they’d approached this because I think it is more than an implied criticism – it’s an explicit criticism.”

In the afternoon, Lord Smith admitted he should have pushed further on press regulation after the death of Princess Diana. Smith, culture secretary from 1997 to 2001 under Tony Blair, said changes made to the Press Complaints Commission resulted in a “palpable change of behaviour” from the press but standards had slipped “egregiously”. He said:

“I have to hold my hands up and say the changes which we were able to secure in 1997 and which lasted for a two or three year period in terms of their impact and effect, I regret that I didn’t see properly at the time that this wasn’t enough and we should have pushed further.”

Smith said he received 1,200 letters from members of the public criticising reporters and the paparazzi following Diana’s death. He added: “There are moments when the balance changes in the government’s favour [as opposed to the press] and the death of Diana was one such moment, where there was a clear public demand for change.”

Lord Justice Leveson said he would consider it “a real failure” if after two years the press reverted to unethical behaviour and said it may be difficult to find an individual who can demand the respect of the press with the confidence of politicians and the public.

On Wednesday, Stephen Dorrell MP – the minister in charge of reviewing press regulation under John Major – said the government decided to “do nothing” about the industry. Dorrell oversaw the government’s response to the second Calcutt report in 1993, and said the government implied unrealistic threats on statutory regulation that “seemed to me merely to advertise the government’s weakness”.

He told the inquiry he was advised to explore a “do nothing” option and had to present the conclusion the government was not going to intervene in regulation “in the least bad way”.

Dorrell said his view at the time was that introducing privacy law would be the wrong thing at the wrong time and would mean a major row with the press. He said press opposition would have made it impossible to pass statutory regulation through Parliament.  He added:

“I think it’s worth repeating the point, the fundamental reasons why I wasn’t in favour then and I’m not really in favour now of the introduction of a tort of privacy is that I think it doesn’t deal with the issue of the protection of the little guy.”

Lord Justice Leveson told Dorrell the government “should have a view on mechanisms that are set up to ensure good practice” but was not suggesting state control of the press. The judge added a regulator would need statutory backing to be legally recognised in privacy and defamation cases.

Andrew Marr said a new regulatory regime could “take away the feeding tube” from the press.The former BBC political editor said today the industry is in a “very parlous state” with many papers losing money and online news becoming more popular. In contrast, he said, political bloggers are an “influential new thing” breaking down the distinction between political players and professional journalists.  He told Lord Justice Leveson the gap between state control of the press and a free-for-all was a “new place to build something” but admitted he struggled to see what it would look like.

Referring to the superinjunction taken out by Marr in 2008, the judge said he was thinking about a structure where “independent regulation could flourish and the sort of speedy, easy access to a remedy which is not available as you yourself have found”. Marr admitted he had gone to the courts because the perception is the Press Complaints Commission is not “strong enough, fast enough or powerful enough”. The injunction was voluntarily lifted by Marr last year. He said:

“I think putting to one side whether it was the right decision [to take out an injunction] very few journalists in any position would go to the PCC if they were looking for swift redress or help.”

He later added: “Though it has had many fine chairmen it’s not exactly the Waffen SS.”

When asked by Carine Patry Hoskins, inquiry counsel, about his questioning of Gordon Brown over his health in 2009, Marr said it was “not a moment in my career I look back on with enormous enthusiasm and pride”.  Marr, who questioned the then prime minister over his ailing eyesight and use of prescription painkillers, said the interview had been “pushing at the edges but legitimate in the circumstances”.  He added:

“I wouldn’t ask the question again. Mainly because I felt we had got some very good information and stories out of that interview. Mr Brown had made some big concessions and made some very serious sounding threats about bankers’ bonuses. Those were the headlines I thought would come out.”

During the afternoon hearing, the inquiry heard from Jeremy Paxman, who said Piers Morgan told him how mobile phones could be hacked. The Newsnight presenter said the conversation took place during a lunch at the Trinity Mirror Group offices in 2002.  Ulrika Jonsson, businessman Philip Green and Sir Victor Blank – then chairman of TMG – also attended.  Paxman said the editor warned him to change the security code on his voicemail service after teasing Jonsson over her relationship with football manager Sven-Goran Eriksson.  He told the inquiry:

“Morgan said, teasing Ulrika, that he knew what had happened in conversations between her and Sven-Goran Eriksson, and he went in to this mock Swedish accent. Now I don’t know whether he was repeating a conversation that he had heard or he was imaging this conversation. In fact to be fair to him I think we should accept both possibilities. It was a rather bad parody. I was quite struck by it. I didn’t know that sort of thing went on. He then turned to me and said, ‘Have you got a mobile phone?’ and I said, ‘Yes’, and he said, ‘Have you got a security setting on the message bit of it?’ I don’t think it was called voicemail in those days. I didn’t know what he was talking about and he explained that the way to get access to peoples messages was to go to the factory default setting and press either 0000 or 1234 and that if you didn’t put on your own code his words, ‘You’re a fool’. I didn’t like the atmosphere. I can’t be specific about how anyone reacted but it struck me as close to bullying, frankly, to be teasing someone about private messages. I didn’t like it.”

Former Home Secretary Lord Reid denied claims he was briefed on phone hacking in 2006. The inquiry heard in March this year he was aware of the investigation around the time private investigator Glenn Mulcaire and News of the World reporter Clive Goodman were charged with hacking.  Reid said the evidence, given by Peter Clarke – a former deputy assistant commissioner in the Metropolitan Police – was incorrect. Clarke told the inquiry he discussed the case with the Home Secretary and the Met had sent a briefing paper to the Home Office.

Reid said he had asked the Home Office to search records and had examined his personal diaries and there was no evidence to back the claim. He told the inquiry he did not know about Operation Caryatid – the original phone hacking investigation – until hearing about the Goodman and Mulcaire arrests on the news.  He said:

“I don’t think you want to know my reaction. It went beyond surprise. I called my office, the rapid reaction team that dealt with the media, I said what the hell is going on? They said they didn’t know.”

Reid said he was only aware of the briefing paper after Clarke’s evidence to the inquiry and said it had been sent to the Home Office’s Terrorism and Protection Unit – meaning he would not have seen it. He added:

“[Clarke] has assumed, he knew there was a note sent to the Home Office, he assumed the questions I asked him were on the basis of that note rather than what I knew from the media and the conversation I had with the Commissioner.”

Reid said in 2006 the hacking scandal was a “very tiny dot at the far edge of a very crowded radar screen” in the Home Office – at the time dealing with over 70 terrorist threats.

On Thursday morning the inquiry heard from Lord Brooke said it was a “great pity” the government could not reach an agreement on press regulation.  The former cabinet minister said he was asked by Prime Minister John Major to take a response on press regulation back to the drawing board, following the second Calcutt report on media intrusion in 1993. Brooke – at the time Secretary of State for National Heritage – later renamed the Department of Culture, Media and Sport – said the government were extremely reluctant to back Calcutt’s call for statutory regulation.  He told the inquiry:  “We were basically being asked to put the draft White Paper, which we’d got ready for March 15, into a drawer and effectively go back to the drawing board.”  He later added:

“I indicate my regret in the closing paragraphs of [my] witness statement. I think it was a great pity that we were not actually able to reach agreement between us… and go forward because although the government might have been able to sleep better at night because it had not crossed the Rubicon, the fact is it might have been a better thing if the Rubicon had been crossed.”

He said the government had to bring forward a response to the Calcutt report after its contents were leaked to the Daily Telegraph, and several critical articles were printed in the tabloid press. His office was told by Number 10 to continue proposing improved self-regulation but to redraft the White Paper with arguments against the system.

During evidence from News Corp lobbyist Frederic Michel – in the afternoon – the inquiry heard David Cameron was aware Jeremy Hunt supported the News Corporation BSkyB takeover weeks before he was appointed to oversee the bid. The inquiry was shown a memo from Hunt to Cameron, sent in November 2010, in which the Culture Secretary championed News Corporation’s bid for the remaining shares in BSkyB.

In the memo, Hunt suggested a meeting with Cameron, Nick Clegg and Business Secretary Vince Cable – then in charge of the bid – to discuss policy issues around the proposed takeover.  He added:

“The UK has the chance to lead the way on this as we did in the 80s with the Wapping move but if we block it out media sector will suffer for years. In the end I am sure sensible controls can be put into any merger to ensure there is plurality, but I think it would be totally wrong to cave in to the Mark Thompson/Channel 4/Guardian line that this represents a substantial change of control given that we all know Sky is controlled by News Corp now anyway.”

Earlier today the inquiry heard how Michel – News Corp’s director of public affairs for Europe – believed Hunt was “probably in favour” of the takeover by December 2010. Michel exchanged over 1,000 text messages with Hunt’s department during the bid, mostly with special adviser Adam Smith.  He said:

“I think there’s two or three events when I probably had the…impression that some of the feedback I was being given had been discussed with the Secretary of State before it was given to me.”

He said the Department for Culture, Media and Sport had been more willing to hear arguments from News Corp about plurality concerns than Vince Cable’s team. The business secretary was removed from his post overseeing the bid after reporters secretly recorded him saying he had declared war on Rupert Murdoch.

The inquiry were shown text messages sent between Hunt and Michel, including several where the lobbyist praised the Culture Secretary for his public speaking. He said the messages to Hunt and his team were appropriate but apologised for some of them being “too jokey”.  Robert Jay QC, inquiry counsel, said there were 191 telephone calls, 158 emails and 799 text messages between Michel and the DCMS, and Smith had sent 257 text messages to Michel between November 2010 and July 2011 along with emails from his personal account.

Michel denied exaggerating his contact with Hunt to senior figures at News Corp – including James Murdoch – but admitted his was “trying to keep the morale up internally” after the company failed to win over Cable. Emails between Smith and Hunt showed the culture secretary had been impressed by commercially-sensitive briefing documents sent by News Corp to his special advisor by Michel in October 2010 – referring to them as “very powerful”. Michel then told colleagues Hunt had found the company’s arguments persuasive.  He added: “My view is that Jeremy Hunt was probably supportive of some of the arguments we were putting forward and he has made that public on plurality.”

Michel defended his contact with Smith but admitted he took comfort that the company had a good chance of success on the bid after submitting undertakings in lieu. The email contact and telephone contact suggests Michel was given a preview of Hunt’s statement on the bid – delivered to Parliament in March 2011 – four hours before it was made public. Michel said: “They were encouraging us to stay in the game, but I wouldn’t say they were parti pris.”

Adam Smith told the inquiry he did not believe Hunt was close to News Corp, saying he did not exactly have a relationship with Rupert and James Murdoch, or Rebekah Brooks. The special adviser said he was given no direct instructions on what he was allowed to do when corresponding over BSkyB.

Asked if he also supported the bid, Smith said: “Smith: “Very broadly. I didn’t, to be honest with you, particularly mind either way where it happened or not. In a funny sort of way I couldn’t quite see why everyone was getting quite so worked up about, but broadly speaking, yes.”

On Friday morning the inquiry continued with evidence from Adam Smith, who said Jeremy Hunt and other officials knew of his contact with News Corporation over the BSkyB bid. Smith said officials in the Department for Culture, Media and Sport asked him to liase with Frederic Michel over various issues but admitted they may not have known the volume and extent of contact between them over the bid.

He denied his contact with News Corp was inappropriate and said he would advise officials on the company’s position following conversations with Michel. He said Hunt knew he spoke to Michel regularly.  Smith said Michel often “bombarded” him with information and he had used his judgment when providing News Corp with information about the bid process between June 2010 and July 2011 – when it was withdrawn over the News of the World phone hacking scandal.  He said: “I wasn’t specifically aware of limits. I would use my judgment on those particular issues… it wasn’t uncommon to give advance notice of certain statements.”

In his written statement, Smith said Michel’s emails were one-sided and exaggerated. One message from Michel to James Murdoch said Hunt was very frustrated after being told not to meet with the News Corp chairman.  He said: “I don’t particularly recall him being that frustrated about it.”

He said he didn’t believe he spoke to Michel about the cost of referring the bid to the Competition Commission, as relayed in another email to Murdoch, saying it would have concerned News Corp but not the DCMS.  He added: “The department didn’t mind one way or another. I don’t remember saying that and I don’t think that was the position that the department had.”

Smith offered his resignation to Hunt on April 24 after reviewing the emails but was told he was just doing his job. The next day, after a meeting with senior officials – including permanent secretary John Stephens – Hunt told his special advisor: “Everyone here thinks you need to go”.

Smith told the inquiry the Cabinet Office had drafted part of resignation statement, adding Smith believed his role was to have a close relationship with News Corp – a part he asked to be removed.  He added:

“I thought by this stage that the perception had been created that something untoward had gone on and therefore that was why I’d offered my resignation the evening beforehand. ‘Everyone here things you need to go’ – I suppose was in my mind confirmation that everyone else also thought that the perception had been created that something untoward had happened.”

Smith regretted telling Michel he had been causing chaos in the DCMS “on your behalf” but said it had been an attempt to mollify News Corp over the bid rather than a sign of collusion. He told the inquiry: “Some of my language was too flippant and loose but I don’t think the substance of what we’ve been through was inappropriate.”

Lord Justice Leveson said of the contact:

“Now there are three possibilities. The first possibility is that this reflected accurately the Secretary of State’s view. The second possibility is that it didn’t represent the Secretary of State’s view, but represented your perception of where the Secretary of State was or would become. And the third possibility is that this just doesn’t fairly reflect the conversation at all.”

In the afternoon the inquiry heard from Jonathan Stephens, who said Jeremy Hunt was given legal advice not to make representations to business secretary Vince Cable on the BSkyB bid.

The Culture Secretary was told in November 2010 it would be i to communicate with Cable – then in charge of overseeing the bid – or speak to any third party about the bid. The advice came a week before Hunt sent an internal memo to David Cameron supporting the News Corporation takeover.

Jonathan Stephens – Permanent Secretary to the Department of Culture, Media and Sport – had written to officials asking whether Hunt was allowed to have a role in the bid process. Patrick Kilgarriff, the DCMS head of legal, sent a follow-up email on December 7.  He said:

“Thanks I appreciate that the advice is not what JS [Stephens] and possibly JH [Hunt] wanted to hear but I think it amounts to – ‘do nothing, do not try to convey your thinking to VC [Cable], he must act quasi-judicially and only through formal processes’.”

On December 21, Hunt replaced Cable as minister in charge of the decision, after the business secretary was recorded saying he had declared war on Rupert Murdoch.  The inquiry was shown an email from Kilgarriff – sent on the same same day – concerned about public comments Hunt had made in support of the bid after News Corp launched the bid in June 2010.

He called the comments “not helpful” and warned they could suggest an element of pre-judgment.  He added:

“That said, the view is far from definitive as is demonstrated by the wish not to second-guess decision-making by regulator and ‘it isn’t clear to me’ so unhelpful and enough to draw comment and perhaps challenge, but probably not fatal when a well-reasoned decision is made with conclusions based on all the relevant evidence.”

Stephens told the inquiry Hunt actively sought legal advice and praised him for his neutrality over the bid. He said he warned the Secretary of State to be careful in his new role and have only formal contact with News Corp. The circumstances under which Hunt took over the bid were “uppermost in everyone’s minds”.

The department were concerned that News Corp could use Cable’s comments in a judicial review, if the bid was rejected by the DCMS.  Stephens added: “Hunt needed to take an even-handed approach, giving all sides an appropriate opportunity to make representations, ensuring that the process was without bias or the appearance of bias.”

Stephens also told the inquiry Adam Smith was drawn into a “web of manipulation and exaggeration” by News Corporation over the BSkyB bid. He said Smith had been drawn beyond what he wanted to do against his will by Frederic Michel.

Stephens recommended Smith be asked to resign after a batch of email and text message correspondence between the special adviser and Michel was made public on April 24. In his written witness statement he said: “The following morning I told the Secretary of State [Hunt] I thought the number, extent, depth and tone of contacts suggested by those emails went beyond what was acceptable.”

Smith had told Hunt he would step down the previous evening, but was told by the Culture Secretary his job was safe.  He later told the inquiry:

“The judgment I’ve formed is that sadly Mr Smith – I personally believe against his will and against his intentions – was drawn into a sort of web of manipulation and exaggeration and was inadvertently, I think, drawn beyond what he indented to do or wanted to do, but unfortunately was drawn beyond it.”

Stephens said he was unaware Smith’s contact with Michel went far beyond information sent to the department from the News Corp legal team. He said the requirements of the Culture Secretary and his team to be fair and unbiased were the “meat and bread” of internal meetings in the department after Hunt was asked to oversee the bid in late 2010.

He said Smith had been present at several meetings with Hunt, DCMS legal advisers and expert counsel when requirements around the quasi-judicial process were discussed. He added:

“That was the bread and butter of those discussions, was asking when can we meet News Corp… do we need to meet other people, what can we share, with whom, at what stage, what are our obligations if we show this to one side, do we have an obligation to show it to others – and that was the constant discussion on all these meetings.”

In a letter to Smith following his resignation, Stephens said: “How you left today was characteristic of the selfless and self-effacing way that you’ve approached your role. I am sorry it was inevitably so traumatic.”  He told the inquiry: “It was a very difficult, traumatic, situation for Adam and for the department which worked closely with him and respected him.”

Lord Justice Leveson – who called the controversy a “calamity” for Smith and the DCMS – asked Stephens how this situation could have been avoided.  Stephens said Smith should have been warned about Michel’s “powers of advocacy” and assured the judge the Cabinet Office has recently issued guidance on quasi-judicial decisions.

The witnesses giving evidence to the inquiry next week are Tony Blair, Theresa May MP, Michael Gove MP, Vince Cable MP, Ken Clarke MP and Jeremy Hunt MP.

Natalie Peck, is the web reporter for Hacked Off and a PhD researcher examining privacy law and public figures. She is @nataliepeck on Twitter.