LONDON (Reuters) – Prime Minister David Cameron, defending his integrity to parliament in emergency session on Wednesday, said he regretted hiring a journalist at the heart of a scandal that has rocked Britain's press, police and politics.
But in hours of stormy questioning he seemed to rally his Conservative party behind him and stopped short of bowing to demands that he apologize outright for what the Labour leader called a "catastrophic error of judgment" in appointing as his spokesman a former editor of Rupert Murdoch's News of the World.
Only if Andy Coulson, who has since resigned, should turn out to have lied about not knowing of illegal practices at his newspaper would the prime minister offer a "profound apology."
Analysts said Cameron emerged from the debate looking stronger than when he was forced to fly home early from Africa to face lawmakers who had delayed their summer recess by a day. But he left some lingering questions unanswered, notably about his role in Murdoch's takeover bid for TV network BSkyB.
After his toughest two weeks in office, the 44-year-old premier spoke with feeling of the Coulson saga: "You live and you learn -- and believe you me, I have learnt," he said.
"It was my decision ... Of course I regret and I am extremely sorry about the furor it has caused. With 20:20 hindsight ... I would not have offered him the job."
He said of Coulson, who is under suspicion of conspiring to intercept calls and bribe police: "I have an old-fashioned view about innocent until proven guilty. But if it turns out I have been lied to, that would be a moment for a profound apology.
"And, in that event, I can tell you I will not fall short."
Beleaguered but hardly under serious threat of being ousted by his party allies after less than 15 months in power, Cameron defended his actions and those of his staff in dealings with Murdoch's News Corp global media empire and with two senior police chiefs who resigned this week over the affair.
"He seems to have gained a bit of breathing space over the course of this debate," said Andrew Russell, senior politics lecturer at Manchester University. "He looked more self assured today than he has been for a little while."
Conservative member of parliament George Eustice spoke for a party relieved by the leader's performance: "Cameron did really well. He's got back on the front foot and taken the initiative."
He added: "The idea that his position as prime minister was in doubt was a complete nonsense."
LABOUR ATTACK
Labour's Ed Miliband, whose muted first year as opposition leader has been fired up by attacking Cameron on the scandal, has not gone so far as to demand Cameron's resignation.
But he asked during the debate: "Why doesn't he do more than give a half-apology and provide the full apology now for hiring Mr Coulson and bringing him into the heart of Downing Street?"
Opposition members of parliament questioned the credibility of Cameron's defense that Coulson had assured him when being hired in 2007 that, as editor of the News of the World, he knew nothing of the hacking of voicemails which led to the paper's royal correspondent and an investigator being jailed.
Coulson left Cameron's office in January just before police reopened an investigation in which Coulson and his predecessor as editor, Rebekah Brooks, have been arrested and bailed.
Labour lawmakers also questioned Cameron about contacts with Murdoch and his staff, including his friendship with Brooks, who resigned as head of British newspaper unit News International.
The prime minister repeatedly deflected questions on what he may have discussed with News Corp about its $12-billion bid to buy out other shareholders in BSkyB. He insisted he had "no inappropriate" conversations and played no role in a government decision to let the bid proceed in the face of protests it would give Murdoch too great a share of media ownership in Britain.
Last week, as scandal engulfed News International, Cameron joined Labour in calling for News Corp to drop it. It did.
While he has derided suggestions from some on the left that backing the BSkyB bid might have been a payback for Murdoch's papers switching from supporting Labour to promoting Cameron at the 2010 election, Cameron told parliament it may make sense to "further remove politicians" from decisions about media mergers.
Tim Bale, politics professor at Sussex University, said Cameron had sounded evasive on the subject and could face a drip-feed of criticism from the scandal for a long time: "There was a very strong sense of him searching for a form of words that would not get him into trouble. The Commons picked up on that and there will be more questions to answer in that regard."
Before the debate, a poll by Reuters/Ipsos MORI showed Britons' satisfaction with Cameron had fallen to its lowest level since he entered office in May last year. Only 38 percent were happy with the way he was doing his job.
But Helen Cleary of Ipsos MORI cautioned: "We know from other scandals that public opinion tends to bounce back."
And she added: "Even now, after Ed Miliband's boost from the scandal, Cameron is ahead ... on personal satisfaction ratings."
Cameron tried during the debate to move the political agenda away from the scandal, saying voters wanted him to concentrate on handling an economic crisis and other pressing matters.
Bale said: "It's going to be very difficult to draw a line under it permanently. But stressing the need to ... start talking about some of the very serious issues on the economy that are going on makes intuitive sense to a lot of people."
CAMERON ATTACKS
As the rowdy session in the House of Commons continued, he also landed blows of his own by pointing out the close relations Miliband's predecessors, Labour prime ministers Tony Blair and Gordon Brown, had maintained with Murdoch, who has been courted and feared by British leaders for four decades.
Referring to Brooks's reported attendance at a gathering hosted by Brown's wife at the prime minister's official country residence in 2008, Cameron taunted the Labour benches: "I've never held a slumber party or seen her in her pajamas."
He referred repeatedly to controversial former journalists hired by Labour and to another former News International reporter, from the Times, who is now a senior aide to Miliband.
A day after Murdoch apologized to a parliamentary committee but denied personal responsibility for the affair, Cameron gave details of a judicial inquiry he has ordered into the scandal and wider issues it has raised over relationships among Britain's media, police and political establishment.
The smoldering scandal exploded in the public consciousness on July 4, when the family of a schoolgirl abducted and murdered in 2002 said police had told them they believed someone from the paper had hacked in to the teenager's voicemail, misleading detectives looking for her and giving her parents false hope.
Police say 60 officers are probing the hacking of messages of possibly 4,000 people, not just the rich, famous or powerful, but crime victims and families of soldiers killed in action.
Many of the leads come from the notes of Glenn Mulcaire, an investigator jailed with the News of the World reporter in 2007.
The 80-year-old Murdoch, who was attacked by a protester with a foam pie during Tuesday's committee hearing, sent a message to his staff that his company was taking steps to ensure that "serious problems never happen again." [ID:nL6E7IK092]
"Those who have betrayed our trust must be held accountable under the law," he said in an e-mail sent late on Tuesday.
An ethics board which Murdoch set up this week said it had now ended continuing payments for legal costs to Mulcaire -- payments questioned by the parliamentary committee on Tuesday.
Cameron's Media Minister Jeremy Hunt said News International still needed to explain how malpractice happened without Murdoch or his son James, now News International chairman, being told. They shut down the 168-year-old News of the World this month.
Shares in News Corp gained 0.7 percent in New York, adding to Tuesday's 5.5 percent rise. Some investors speculate the scandal may hasten a handover of power in the company from the Murdoch family in a way that may streamline global operations.
In Murdoch's native Australia, Prime Minister Julia Gillard said the local arm of News Corp would face "hard questions" after the phone-hacking in Britain.
(Additional reporting by Tim Castle, Kate Holton, Mohammed Abbas, Paul Hoskins, Peter Griffiths, Olesya Dmitracova, Georgina Prodhan and Stephen Mangan; Writing by Alastair Macdonald)
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