Leveson inquiry: I was victim of hacking coverup, says Rupert Murdoch

• Media mogul had no regrets after closing of the News of the World

• Decision made due to paper’s brand being “irretrievably destroyed” after Milly Dowler scandal

• Murdoch argues Sun couldn’t function unless suspensions of key staff arrested in phone hacking investigation were lifted

Speaking about the affair, which he said would leave “a blot on my reputation” for the rest of his life, the 81-year-old chairman of News Corp said senior figures within the paper had deliberately concealed the extent of illegality at the paper.

He admitted having “failed” to look properly into the evidence of phone hacking at the paper in 2007, ensuring the practice continued up until last year, when evidence emerged that the paper had hacked the phone of murder victim Milly Dowler.

His decision to accept that hacking was confined to a “rogue reporter”, royal editor Clive Goodman, had cost his company “hundreds of millions of pounds”.

• In full: Murdoch’s meetings with senior politicians

While accepting responsibility for the mistake, he hinted strongly that executives within the News of the World had sought to mask the true scale of the scandal.

“There is no question in my mind maybe even the editor, but certainly beyond that, someone took charge of a cover-up, which we were victim to and I regret.”

He added: “There were one or two very strong characters there, who I think had been there many, many, many years and were friends with the journalists; or the person I’m thinking of was a friend of the journalists, a drinking pal and a clever lawyer.”

‘Shameful lie’

The paper’s former lawyer, Tom Crone, issued a statement on Thursday night, saying Mr Murdoch was guilty of a “shameful lie”. Both he and former editor Colin Myler last year pointed the inger of blame for any cover-up at Mr Murdoch’s son, James.

Mr Crone said Mr Murdoch’s claims “greatly demean him”.

The huge News Corp group will now be waiting to see whether Mr Murdoch’s reputation has not been further damaged by the evidence, amid fears that media regulators in both the UK and United States could crack down on the company.

Mr Murdoch was, therefore, keen in his evidence session to appear contrite. “I have to say I failed,” he said. “I am sorry about that. I should have done more to watch over it.”

He added: “I am guilty of not having paid enough attention to the News of the World, probably throughout all of the time that we’ve owned it.

“I was more interested in the excitement of building a new newspaper and doing other things … it was an omission by me,” he said.

“There was no attempt either at my level or several levels below me to cover it up,” he said.

“We set up inquiry after inquiry, we employed legal firm after legal firm, and perhaps we relied too much on the conclusions of the police.”

The billionaire told the Leveson Inquiry his company has spent “hundreds of millions of dollars” investigating activities at all of its newspapers in the wake of the hacking scandal.

Internal inquiries have been through 300 million e-mails and passed anything “faintly suspect” to police, he said.

“We are now a new company, we have new rules, we have new compliance officers, and I think we are showing in the Sun that we can still produce the best newspaper without the bad practices,” he said.

Mr Murdoch told the inquiry that in hindsight he should have spoken personally to Goodman when the former royal editor claimed the practice of phone hacking was widespread.

He said: “I should have gone there and thrown all the lawyers out of the place and seen Mr Goodman one-on-one – he had been an employee for a long time – and cross-examined him myself and made up my mind, maybe rightly, maybe wrongly, was he telling the truth.

“And if I had come to the conclusion that he was telling the truth, I would have torn the place apart and we wouldn’t be here today. But that’s hindsight, which, of course, is a lot easier than foresight.”

He also reflected on the week when he decided to shut the News of the World, following the revelations about the hacking of Milly Dowler’s phone.

No meetings with Culture Secretary

“All the newspapers took the chance to make a really national scandal, it made people all over the country aware of this, you could feel the blast coming in the window, almost. I panicked. But I’m glad I did. I’m sorry I didn’t close it years before and put a Sunday Sun in.

“I tell you what held us back, News of the World readers. Only half of them read the Sun.”

Pressed on the behaviour of his company as it sought to convince the UK government to support its plans to take full ownership of BSkyB, Mr Murdoch denied he had ever met Culture Secretary Jeremy Hunt. He also claimed to be “surprised” by the extent of his company’s involvement with the UK government ahead of the bid.

On Tuesday, more than 160 pages of e-mails were released to the inquiry showing correspondence between advisers to Mr Hunt and News International’s public affairs director, Frederic Michel.

At the end of his seven hours of evidence, Mr Murdoch urged Lord Justice Leveson not to overregulate the press.

“I think you have a danger of putting regulations in place which will mean there will be no press in ten years to regulate,” he said. “And I honestly believe that newspapers and all they mean, mistakes and qualities, are a huge benefit to society.”

He added: “A varied press guarantees democracy. We want democracy rather than autocracy – I think we would all agree with that in this room.”

Mr Murdoch also said he opposed a privacy law, limiting newspapers’ ability to probe people’s lives. “Privacy laws are always proposed for the protection of the great and the good and not for the mass… the people who make up our democracy.”

On whether he uses his newspapers to promote his other business interests, he said: “I certainly do not tell journalists to promote my TV channels or our TV shows or our films.

“You ought to read the critics, the New York Post, on all our Fox films. They kill them.”