Under-fire Culture Secretary Jeremy Hunt told the Commons he acted with "scrupulous fairness" during News Corp's BSkyB bid despite the resignation of his special adviser earlier today.
Hunt denied that emails between adviser Adam Smith and News Corp public affairs executive Frederic Michel were evidence of secret 'back-channel'communications over the bid, and that he essentially acted as a 'cheerleader'for Rupert Murdoch.
"They did not influence my decision in any way," he told MPs today. "The volume and tone of these communications were clearly not appropriate in a quasi-judicial process and today Adam Smith has resigned as my special adviser.
"Although Adam Smith accepts that he overstepped the mark on this occasion, I want to say on record that I believe he did so unintentionally."
Hunt has asked the Leveson Inquiry to push forward the date for when he gives evidence, adding: "I am totally confident that when I present my evidence, the public will see that I conducted this process with scrupulous fairness throughout."
Commenting on Smith's role in the affair, Hunt added: "He did not believe he was doing anything more than giving advice on process. I believe him to be someone of integrity and decency and it is a matter of huge regret to me that this has happened."
Hunt told MPs: "Throughout, I have strictly followed due process, seeking the advice of independent regulators - something I didn't have to do - and after careful consideration acting on their advice."
He rejected Labour's calls for him to resign, claiming this was 'not the time to jump on a political bandwagon".
Earlier at Prime Minister's questions the Labour leader Ed Milliband said there was a "shadow of sleaze" handing over the Government following the latest revelations.
"While his Culture Secretary remains in place, while he refuses to come clean on his and the Chancellor's meetings with Rupert Murdoch, the shadow of sleaze will hang over this Government," said Milliband.
He added: "It's a pattern with this Prime Minister - Andy Coulson, Rebekah Brooks, and now the Culture Secretary... When is he going to realise it is time to stop putting his cronies before the interests of the country?"
But David Cameron stood by the Culture Secretary, responding: "In judging this important bid, the Culture Secretary sought independent advice from independent regulators at every stage, although he did not need to, and the Culture Secretary took that independent advice at every stage, although he did not need to.
"The way that the Culture Secretary has dealt with this issue is in stark contrast to the Government of which (Mr Miliband) was a member."
At the start of today's Leveson Inquiry hearing Lord Justice Leveson said he would "hear every side of the story" about Hunt's involvement in News Corp's BSkyB bid before drawing any conclusions.
He said: "I understand entirely the reason for some of the reaction to the evidence yesterday and, in particular, to the emails about which Mr Murdoch was asked.
"But I am acutely aware from considerable experience that documents such as these cannot always be taken at face value, and can frequently bear more than one interpretation.
"I am absolutely not taking sides or expressing any opinion, but I am prepared to say that it is very important to hear every side of the story before drawing conclusions.
"In due course I will hear the relevant evidence from all the relevant witnesses, and when I report I will then make the findings that are necessary for me to fulfil the terms of reference that the Prime Minister set for me."
In his resignation statement Smith said: 'While it was part of my role to keep News Corporation informed throughout the BSkyB bid process, the content and extent of my contact was done without authorisation from the Secretary of State.
"I do not recognise all of what Fred Michel said, but nonetheless I appreciate that my activities at times went too far and have, taken together, created the perception that News Corporation had too close a relationship with the department, contrary to the clear requirements set out by Jeremy Hunt and the permanent secretary that this needed to be a fair and scrupulous process.
'Whilst I firmly believe that the process was in fact conducted scrupulously fairly, as a result of my activities it is only right for me to step down as special adviser to Jeremy Hunt."
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