Rupert Murdoch back at Leveson Inquiry for second day

News Corporation boss Rupert Murdoch will face questions about how he dealt with allegations of criminal behaviour at his UK newspapers when he returns to the Leveson Inquiry later.

The 81-year-old, giving evidence for a second day, will be asked about the phone-hacking scandal and claims of illegal payments by his journalists.

On Wednesday Mr Murdoch claimed then-PM Gordon Brown once threatened to "make war" on his company.

That was later denied by Mr Brown.

Mr Murdoch told the Leveson Inquiry into press standards that the Labour prime minister had phoned him in 2009 after the Sun newspaper had moved to back the Conservatives.

Mr Murdoch quoted Mr Brown as saying: "Well, your company has declared war on my government and we have no alternative but to make war on your company."

Mr Murdoch said that Mr Brown had not been in a "balanced state of mind" when he made the phone call.

But later, in a statement, Mr Brown responded by saying the allegation was "wholly wrong".

Mr Brown said he did not phone, meet, or write to Mr Murdoch about the Sun's decision to support the Conservatives.

"The only phone call I had with Mr Murdoch in the last year of my time in office was a phone call specifically about Afghanistan and his newspaper's coverage of the war," he said.

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It suggested that the Murdoch newspapers really did have political power, something he was going out of his way to play down”

Torin DouglasMedia Correspondent

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"I hope Mr Murdoch will have the good grace to correct his account."

During his evidence Mr Murdoch said he had frequently met Tony Blair when he was prime minister.

The media mogul said he regarded Mr Blair as a personal friend and had enjoyed speaking to him before, during and after his time as prime minister.

He told the inquiry: "I want to say that I, in 10 years of his power, never asked Mr Blair for anything. Nor indeed did I receive any favours. If you want to check that, I think you should call him."

In his written statement, Mr Murdoch said he first met Prime Minister David Cameron, who was then Leader of the Opposition, at a family picnic at his daughter's country home.

Mr Murdoch denied ever having discussed with Mr Cameron News Corp's bid for the 61% of UK broadcaster BSkyB it did not own.

He said the perception of his influence over politicians irritated him because it was a "myth".

Rupert Murdoch on Mrs Thatcher: "I didn't expect any help from her, nor did I ask for any"

Mr Murdoch also denied asking or being offered any favours when he met then-Prime Minister Margaret Thatcher at a lunch in 1981, at the same time as his company was buying the Times and Sunday Times newspapers.

Asked about the News of the World, which was shut down last summer in the wake of the phone-hacking scandal, Mr Murdoch said he was "sorry to say" he "never much interfered" with the paper.

In his witness statement to the inquiry, Mr Murdoch confirmed that News Corp's Management and Standards Committee was co-operating with the US Department of Justice.

It comes after reports that investigations into phone-hacking allegations could extend to the US authorities.

Meanwhile, Culture Secretary Jeremy Hunt's special adviser Adam Smith quit after Mr Murdoch's son James revealed details at the inquiry on Tuesday of contacts between Mr Hunt's office and News Corp at a time when it was bidding to take over BSkyB.

Mr Hunt has rejected calls for him to resign, telling the Commons he had "strictly followed due process" in overseeing the bid.