The former business secretary – nicknamed “the Prince of Darkness” for his use of political spin – told the Leveson Inquiry that Tony Blair sought to “reassure” the Sun over issues like Europe.
But he insisted yesterday there were no pacts made with any media proprietors in order to win their newspapers’ support for Labour.
“In my view and from my experience and knowledge of the time, there was no deal, express or implied, between any proprietor and any leading politician for the Labour Party that suggested that in return for that proprietor’s support for the Labour Party they could expect some favourable commercial treatment in return,” he said.
“I don’t believe any such deal happened and I don’t believe such a relationship existed.”
Lord Mandelson acknowledged that both Mr Blair and his successor Gordon Brown “arguably” became “closer than was wise” to Mr Murdoch. But he said there was no “Faustian pact”.
He went on: “It is also arguably the case, however, that personal relationships between Mr Blair, Mr Brown and Rupert Murdoch became closer than was wise in view of the adverse inference drawn from the number of meetings and contacts they had.
“The same, I am sure, can be said for Mr Cameron and, no doubt, his predecessors.”
Lord Mandelson said the Labour Party and News International “had a famously bad relationship” in the 1980s.
He told the inquiry: “What we all wanted to do in the 1990s, should we ever have any hope of winning a general election again – and by that time we had lost three or four – we didn’t want to make permanent enemies of News International.”
“Dialogues were opened” with journalists, editors and executives, “including the proprietor”, Lord Mandelson said.
He added: “I don’t think that’s unreasonable.
Lord Mandelson accused newspapers of regarding themselves as “above the law” and said it would take a “brave” government to take them on.
In his written evidence, he said: “The fact is, the press has been too powerful for any government, in normal circumstances, to take on.
“Like the trades unions of old, they want to operate above the law. And like the trades unions, when you try to apply the law, they shout from the rooftops about basic freedoms and fundamental rights.”
Discussing the now-defunct News of the World, he said it had demonstrated an “absence of a moral compass”, adding that other newspapers were also guilty.
He called for regulation of the media, saying: “I don’t see why the press should be the last professional body left in this country that has some form of accountability… in what it does. Even lawyers have that now.”
Lord Mandelson said he called The Sun “chumps” for backing the Tories in 2009 because he thought the paper’s readers would find it “incredible”. The reason I said I thought they were a bunch of chumps was because, for a newspaper like the Sun to insult their readers by supporting one party and their leader one day and then turn on a sixpence and have this Damascene conversion where they find that they are Conservative supporters and that David Cameron is the bee’s knees, would be incredible to their readers,” he said.