>> do you remember being interviewed by a british tv presenter called ann diamond, probably in the 1980s who asked you about princess diana and elton john? >> no, i saw that allegation a few days ago, and i have no memory of either the interview or who ann diamond is. i am sorry. too remote from this country, perhaps. >> the point she made was simply this, that your newspapers she said were ruining some people's lives and how did you feel about that, and how could you sleep at night knowing what was going on, and she said that you brushed that aside. might you have done that? >> i try to answer every question that's put to me. i may have.

i don't think so. >> the claim is also made that you then decided in collusion with your editors to target her. is that right or not? >> that's absolutely wrong. i know who made that claim. it was my housekeeper and a very strange bird indeed though he did keep it clean. >> another quote from lord wyatt, the trouble is newspapers will bring anybody down just for the hell of it these days. they find it shows their power, titillates readers and helps sell newspapers. is he wide of the mark. >> yes, i think that's a very unkind thing, of course mr.

wyatt felt that when he wrote a column for the news of the world he was the most powerful man in the country and greatly resented when the editor wanted to stop it, tell him this is many years later when he wrote that, no, but let's be serious about this. only yesterday, maybe the day before, the daily mail had all page one and a double page attacking google for not deleting porn from its service. maybe i am old-fashioned. i happen to agree with every word of it. that was a very, very strong atta attack. i think that's fair. i think a newspaper that wants to if it feels someone is doing

wrong, a company is doing wrong, i think it is fair to debate it and debate it in strong terms. >> equally if another newspaper is doing wrong, it is right to expose it and debate in strong terms. >> yes. >> one of the problems is that where as the press hold all of us to account, politicians, even judges, there is nobody actually often holding the press up to account. >> i must say i don't feel that. i feel that i am held to account every day. i am held to account by the people every day. they can stop buying the paper. i stand for election every day as i said yesterday. i am constantly attacked. they love attacking me. whether it is the daily mirror or the guardian or whatever.

i develop pretty thick skin over the years. i am under strict instructions by my lawyers not to say this, but i am going to. i feel that -- >> you just caused three coronaries. >> i was really shocked for the statement of mr. daker the other day that his editorial policy is driven by commercial interests. i think that is about the most unethical thing i have read for a long time and once more from the most surprising source as i have great respect for his abilities. indeed, many years ago when he was editor of the evening standard he agreed to leave them

to come and edit the times. i was extremely pleased and associated quickly made editor of the daily mail and vastly increased salary where some friends of mine would disagree with this strongly, but i think he has been a great success. i was shocked when he said that his policies, the editorial policy of the mail is driven by commercial interest. that's on the record here somewhere. >> i think to be fair to him, mr. murdoch, that was said in the context of the alliance which was forming defense the bskyb bid, and he made it clear quite frankly the philosophy under pinning that alliance was commercial considerations rather than legal considerations. he wasn't making a broader statement as regards the daily news and -- >> he said they were going to do

just the sort of thing you have been attacking -- alleging that i do, that he was going to be driven by commercial interests in his editorial policy. the words are very clear. i might expect it of other newspapers. i didn't expect it of the mail. >> i will stand to be corrected or probably affirmed by those behind me. i am pretty sure i am right on this. let's not debate mr. daker today, mr. murdoch. would you agree that the -- >> i need a transcript. go ahead. >> would you agree that maintaining high ethical standards in newspapers costs money? >> no, i don't. i agree that failure to maintain

ethical standards can be immensely expensive as i am here witness of today. >> that's certainly true. we'll come to that. in order to have proper systems in place internally to ensure that ethical standards are installed in the first place and then maintained and preserved, there is a commercial cost, isn't there? >> no. we have compliance officers. we have more now as a result of this. the cost is even though they're highly paid people, and distinguished lawyers, it is peanuts compared to what this whole scandal and inquiry has cost us. i mean, i am talking now

hundreds of millions. i think -- you may want to go through a couple of other instances first before i would like to just expand on that at some stable. stage. >> now, put to your point, mr. andrew niels said in an interview he gave to cnn and just your reaction, please, mr. murdoch, said this, of course rupert murdoch can't be held responsible for every individual act just as when i was editor of the sunday times i couldn't be held responsible for every individual act that my tens of scores of journalists would take. you create a climate in which people think it is all right to do certain things and i would argue that rupert murdoch with his take no prisoners attitude to tabloid journalism, the end will justify the means, do

whatever it takes, that created the kind of newsroom climate in which hacking and other things were done with imp u.n. ity on an industrial scale. >> i don't think he knows the first thing he was talking about. i would say at the beginning of that quote that i may not be able to know what every journalist is writing, but it is certainly the duty of the editor to take responsibility for every word in his newspaper. it is harder for someone the chairman of the company of a lot of newspapers. that's by the way explanation, not excuse. >> the second part of the quote, about the -- >> seems to have done it profitable to get out and spread

lies about me but that's his business. i mean, several people that goes for now, somewhat of an industry, which i heard this inquiry has done a lot yesterday to dispel a lot of those myths we have given you hard, written, evidence to show that a lot of these were just myths. i hope that i take it they will go up on your website in time. is that fair to assume? >> mr. murdoch, if i can proceed. >> can i have an answer? >> i don't give answers to question, mr. murdoch. i just ask them. the evidence that you have presented and the exhibits to your statements will be placed

on the website. >> thank you very much, sir. >> if one takes out some of the later language in mr. neil's interview, and puts it in this way, is not the ethical tone of a newspaper or group of newspapers set by the chairman, particularly if the chairman has been there for decades? >> i hope i have had that effect. for the most part we employ 6,000 journalists around the world. as a result of this hacking we have not only spent hundreds of millions here, we have been through every e-mail and every

check possible is of all of your australian newspapers and two retired supreme court justices and we want to be absolutely certain that this is only in here in the london. i think we satisfied ourselves. we have great journalists, great, great journalists that have done some amazing work. i could go back a week or month or three months or three years. all over the world, different countries, i mean, we exposed the whole chinese scandal, days

ahead of it in public in china. >> mr. murdoch, may i ask you about your attitude to self regulation although this was some years ago now, we had some evidence from mr. piers morgan at a time when he was editing the news of the world which i think was in 1994 and 1995, and what happened was that the press complaints commission upheld a complaint by earl spencer over private photographs of his wife. publicly you supported the press complaints commission and upgraded mr. morgan yet mr. morgan's diaries say, 22nd of may, 1995, that you called him into your office and said this, i am sorry about all of that press complaining thingam a.j.

ig. did you say that? >> no. >> did you say anything like that? >> i may have said i have confidence in you as editor, put that behind us, remember it, but get on with it. >> he also has you saying we had to deal with it the way we did or they would have all been banging on about privacy law again. we don't need that right now. might you have said that? >> i don't think so. generally i don't believe in privacy law, but to discuss we discussed privacy yesterday. i think privacy laws are always proposed for the protection of the great and the good and not

for the mass of people that make up our democracy. >> i have been asked to put thesis questions to you by another core participant, mr. murdoch. have you ever instrucked or encouraged editors to pursue studies that promote your own newspapers, tv channels or other business interests? >> i don't have any other business interests. i certainly would ask or suggest, i don't think it needs suggesting, editor of the sun that it would be good to mention what's coming in the new paper on sunday. there is self promotion of newspapers and it goes back, remember my first training days 55 years ago or more on the

daily express we had something every day promoting the glories of the next day's express. >> i am not sure that's what the question has been addressed to at all. >> you suggested that i was telling journalists to promote other business interests. i am saying i have no other business interests. >> your other business interests are within other newspapers and tv channels, aren't they? >> yes, but i certainly do not tell journalists to promote our tv channels. or our tv shows or our films. you ought to read the critics in the "new york post" of all of our fox films. they kill them. >> have you ever instructed or encouraged your editors to pursue negative stories about

competitive businesses or rival individuals? >> no. i can't think of it. who, for instance? >> i am just asking these general questions which are being put. have you ever asked your newspapers to make life uncomfortable for regulators such as the commission when they are considering action that might be to the detriment of news corps businesses? >> no. >> why did you close the news of the world rather than tough it out, mr. murdoch? >> i think that's explained in my statement, but i could put it a little more succinctly in that when the milly dala situation

was first given huge publicity i think all the newspapers took the chance to really make a really national scandal. it made people all over the country aware of this who hadn't followed. you could feel the blasts coming in the window almost. as i say, i would say it succinctly. i panicked, but i am glad i did. >> it is obvious closing it was a disaster. >> i am sorry, i didn't close it years before and put the sunday sun in. i tell you what held us back, the news of the world readers. only half of them ever read the sun. all surveys show that. in fact, so that probably was

consideration at the time. >> closing the news of the world was a disaster financial and reputational, wasn't it? >> love to spoil reputation. it certainly hasn't stopped a record of excellent sales every day of the sun and our other newspapers. >> would you agree that -- >> let me agree with you. i think that historically this whole business of the news of the world is a serious plot on my reputation.

>> would you agree, mr. murdoch, thatmurdoch, that reputation is a vital commercial asset which needs actively to be managed in any business? >> yes, i think that's what keeps the public relations business going. >> did you -- did your business register the risk of a compound commercial disaster of these proportions? >> could you ask that again. >> did you business register the risk of a compound commercial disaster of these proportions? >> no, it was a decision taken very quickly by my son.

>> so you -- >> i think mrs. brooks was still there. and myself. it was done like that. >> i think you misunderstood the question. i'm not looking now at the decision you took, i think on the 7th of july. >> didn't we sit down and write out the costs in how many millions? no. >> i'm looking at a much earlier stage, whether your business, as a matter of business practice, registered the risk of compounds commercial disaster of these proportions. so going back to 2005 or 2000 or even 1995, did you think about these -- >> 1995? >> yes. >> what for? >> we're talking about the risk of this sort of reputation of ka tras trophy. did it enter into your radar -- >> we were always interested. people thinking well of our company and thinking life our

newspapers. >> do you accept that the evidence demonstrates that your company managed the legal risk by covering it up? >> no. >> even though you've said -- >> there was no attempt either at my level or several levels below me to cover it up. we set up inquiry after inquiry. we employed legal firm after legal firm. and perhaps we relied too much on the conclusions to the police. you know, i think that -- well, you may want to take me forward,

but just -- you saw our response to sienna miller. we realized we had a major problem. then the select committee at parliament met and heard from some of our executives and accused them of collective amnesia. and i think that our response to that was far too defensive. and what's more, worse, disrespectful of parliament. then, of course there was a further thing, i think, that was in july last year. i appeared. and one of the members challenged me and said, are you the person to clean this up. and i said yes. the buck stops with me, and i pledge i will clean it up. and i did. i have spent hundreds of

millions of dollars. miss akers, i think, said that we had electronically examined $300 million e-mails of which we chose 2 million which we examined ourselves and anything faintly suspicious was passed to the police. now that led to, i think, a dozen. to the midnight arrests. because of my pledge, not because the police. they did not ask us to go into that extent. we went way beyond what they'd asked us to do.

and i remain greatly distressed that people who have been beneath. some friends of mine, but, of course, my distress, it would be presumptuous to compare it with the immense disturbance, if you like, and hurt to the people who were arrested. and i feel responsible for that. but i'm glad we did it. 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 you can still produce the best newspaper without the bad practices that were disclosed.

>> okay. mr. murdoch, might it be said that while that answer demonstrates that when the decision was taken in the summer of last year to clean out the stables as it were, that was almost arguably at least, an overreaction because you realized that the history before between 2006 and last year demonstrated cover-up. therefore it was necessary to go to arguably excessive lengths to -- >> certainly it disclosed not to the select committee but what was coming out, and hacking. although we then went in and we went way beyond it. and way beyond anything the police asked us to do.

but i had made my personal pledge to parliament and although it's caused great pain, huge pain for families and, as i say, distress to myself, but we did it. i'm glad we did it. we are now a new company altogeth altogether. and reminded me for talking about hindsight, but if i may for just a moment, if i again, had really got into it when mr. goodman read that letter in 2007 saying he shouldn't have been

making accusations that other people were involved, we went through other things. i should have been -- i should have gone there and thrown all the lawyers out of the place and seen mr. goodman, one on one. he'd 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. i have come to the conclusion he was telling the truth, i would have torn the place apart and we wouldn't be here today. i'm talking 2007. but that's hindsight which, of course, is a lot easier than foresight, but. >> looking back on this, mr.

murdoch, presumably you see the link between ethical misbehavior and legal misbehavior, don't you? >> oh, yes. legal rules are certainly devised to try and encourage ethical behavior. i think that's a fair generalization. although what i would call unethical behavior, if, for instance, i had asked prime ministers for favors in turn for -- i would have said that would be very unethical, but i doubt if it would have been