Chancellor George Osborne today defended the appointment of Andy Coulson as the Tory's communications chief when he appeared at the Leveson Inquiry this afternoon.
He told the counsel to the inquiry, Robert Jay QC, that he considered Coulson a friend but had not seen him since the ex-News of the World editor since the phone-hacking scandal erupted last year.
Asked why the party wanted to take on Coulson, Osborne said: 'First of all he had been the editor of a major national newspaper, so there was the professional experience, and what we needed was someone who was going to be able to handle communications for a large organisation... and also be able to handle on a daily basis the problems that were thrown at us."
He added that Coulson also struck him as 'someone who had conservative values". Osborne insisted that his links with News International were not relevant.
'I have seen people suggest that the reason we hired him was because of his connections with the Murdochs and Rebekah Brooks, or his knowledge of the internal working of News International,'he said.
'I can tell you that was not a consideration. What we were interested in hiring is someone who was going to do the job going forward extremely well.
'We hired him because we thought he had the experience and the personality to do the job, and I would suggest to you that everything that's happened since, no one has mounted a serious complaint about the way he was the director of communications for the Conservative party and subsequently for the Government."
Elsewhere in his evidence, Osborne said that he was an "an external observer" of News Corporation's bid for BSkyB.
Osborne said he did not have a "strong view" on the merits of the bid. He said he regarded the "whole thing" as a "political inconvenience".
Osborne told the inquiry that he had not had a "strong view about its merits because as far as I could see it was just going to cause us trouble one way or the other".
He said that whichever way it went, it was either going to offend one media camp or another.
Osborne added: "I regarded the whole thing as a political inconvenience and something we just had to deal with, and the best way to deal with it was to stick to the process."
He said he was "merely an external observer of the process" and said he had had no "specific conversations" about it with either Business Secretary Vince Cable, who was initially responsible for it, or Culture Secretary Jeremy Hunt, who later took over responsibility.
The quasi-judicial role was transferred to Hunt after Cable's opposition to the bid was exposed in the media.
Osborne said he had not even been aware of the Prime Minister's view of the bid and said he had had only one conversation with News Corp's James Murdoch about it.
And Osborne dismissed suggestions of a conspiracy around Mr Cable being stripped of responsibility for the bid after he was secretly taped suggesting he had "declared war" on Mr Murdoch.
He said: "You have to be a real fantasist to believe that come these events we had knowingly allowed Vince Cable to be secretly recorded, we knowingly told the Telegraph not to publish that information.
"That information then emerges in the middle of the afternoon and we then, all part of this cunning plan, put Mr Hunt in charge. It doesn't stack up."
Lord Justice Leveson was told of a text exchange between Osborne's special adviser, Rupert Harrison, and News Corporation lobbyist Frederic Michel in November 2010.
Michel had texted asking if Osborne might write to Cable regarding the "Sky merger".
Harrison had replied: "We will have to discuss it with g when he is back from China."
Lord Justice Leveson suggested that Harrison might have replied by saying: "This is a judicial process. We are not interfering. Be off with you."
Osborne told the judge: "He was being diplomatic."
He added: "There were lots of people at the time saying 'the bid should go ahead' or 'the bid should not go ahead' and people were saying things at drinks parties and events of various kinds.
"When you are doing a job like mine or working as a special adviser for someone like myself you get asked about a whole range of things the whole time.
"In this case I think what Mr Harrison was doing is absorbing Michel's texts.
"The key thing is he doesn't raise it with me." He said Harrison had not behaved "improperly".
'We are going to screw this up'
Osborne was also asked about a text exchange with Hunt on December 21 2010 - the day Cable was stripped of responsibility for the bid.
Shortly after 4pm, Hunt texted Osborne saying he wanted to chat about the Sky bid and was worried "we are going to screw this up". He then said James Murdoch had concerns about the legitimacy of the process. Osborne texted in reply: "I hope you like the solution."
Osborne today told the inquiry that he meant the solution to the Cable problem.
He explained "My reference here is to the solution to that particular problem - Dr Cable's remarks."
He later denied attending a private meeting with the Murdochs in a Swiss ski resort months before the 2010 general election amid allegations that a deal had been done over the family's plans to take full control of BSkyB.
The Chancellor told the Leveson Inquiry he had met Rupert and James Murdoch, as well as Rebekah Brooks, in a chalet in Davos at the World Economic Forum but it had been the previous year.
It comes after newspaper reports suggesting a pact was made in January 2010 over News Corporation's plans for BSkyB.
Asked if he had attended a "private meeting" at Davos in January 2010, he replied: "No, it's not true."
Osborne said he and David Cameron spent the 2009 meeting "gently" trying to turn the conversation to domestic politics and the looming general election but Rupert Murdoch was more interested in international economics.
He said: "There was a meeting in 2009 in a chalet with Rupert Murdoch, James Murdoch and Rebekah Brooks. "As part of the Davos conference people rent hotels and chalets. It was not particularly unusual it was in a chalet."
The lunch focused on the global financial crisis, he added.
"I remember David Cameron and I seeking to try to bring the conversation gently to domestic politics and what the Conservative Party was doing to put itself in a position to win a general election.
"But Rupert Murdoch was more keen to talk about the international economic situation. I don't think this was a crucial encounter."
Osborne told the inquiry one of James Murdoch's "bugbears" was the BBC and he raised it repeatedly.
"There was an issue that he was concerned about, that was the BBC and the licence fee," he said.
"It was more of a complaint that we had in this country a taxpayer-funded state broadcaster. I made it clear to him then that we were not going to change that."
He added: "He raised that on a number of occasions. That was a bugbear of his."
Osborne said newspapers were partly regulated by the market because customers would stop buying them if they did not agree with the views expressed in them.
"If politicians are seen to be entirely craven to newspapers I think the public sense that and sniff it out," he added.
"I think the public are much smarter in this process than they are sometimes given credit for."