Cameron in crisis as he fights off Coulson allegations

By By Ian Dunt

David Cameron endured a bruising press conference this morning as he furiously tried to defend himself against questions over his judgement in hiring Andy Coulson.

The hastily-called press conference took place just moments before it was confirmed Mr Coulson has been arrested on suspicion of corruption and phone-hacking.

Mr Cameron cut a nervous figure as he was repeatedly questioned on why he hired Mr Coulson as his head of communications after he had resigned from his position as News of the World editor over phone-hacking.

"The decision to hire him was mine and mine alone and I take responsibility for it," he told reporters in Downing Street.

"He said at the time he didn't know what was happening on his watch. I took the decision – my decision, my decision alone – to give him a second chance.

"That's what happened. I don't think it's particularly meaningful today to put a different gloss on it. People will judge me for that, I understand that."

Under persistent questioning, the prime minister refused to confirm what he had actually asked Mr Coulson.

He said he did not recall receiving any information from Guardian editor Alan Rusbridger, who yesterday revealed he has passed on a message to Mr Cameron through an intermediary that Mr Coulson should not be given a job due to the culture he had presided over at the News of the World.

"All I can do is explain why I did what I did," he said.

"No-one gave me any specific information. I sought assurances. I got assurances. I commissioned a company to do a basic background check. All I can do is set out my thinking."

The prime minister's defensive performance over the Coulson relationship was so extensive it almost drowned out the other details of a hugely significant political event with major repercussion for the media, the police and politicians.

In a remarkable early shot, he went further than before in issuing a message to News International that it should fire Rebekah Brooks, the editor of the News of the World when Milly Dowler's phone was hacked.

"It has been reported she offered her resignation over this and in this situation I would have taken it," he said.

While still falling short of demanding her resignation, the comment will be taken as a warning about Mr Cameron's future relationship with News International by the Murdoch family.

Ms Brooks held a meeting with News of the World staff today in which she again refused to resign.

"You may be angry with me, I understand. But I'm angry at the people who did this and feel bitterly betrayed," she was quoted as saying by sources inside the meeting.

There were unconfirmed reports that Ms Brooks was later taken off the clean up operation at News International.

As Mr Cameron spoke, BSkyB shares went into freefall, dropping 4.8% in minutes.

The prime minister also announced that the inquiry into phone-hacking would be led by a judge, meaning witnesses will give evidence under oath.

The inquiry will start once the criminal proceedings are over, but Mr Cameron announced a separate inquiry into media culture and press ethics starting this summer.

Importantly, Mr Cameron made it clear that he did not believe that self-regulation of the press should continue, saying whichever regulatory body emerges from the wreckage should be independent of the press and of government.

The comment threatens to bring to an end a system of self-regulation that has been largely unquestioned for generations and effectively signs the death warrant of the Press Complaints Commission (PCC)

"We've all been in this together – the press, politicians and leaders of all parties, and yes, even me," he said.

"Throughout all of this the government at the time did nothing and frankly neither did the opposition.

"Party leaders were so keen to win the support of newspapers we turned a blind eye, we failed to get on top of the issue," he continued.

"When the scandal hits you can downplay it or accept the seriousness of the situation and deal with it.

"This is a wake up call. It's on my watch that the music has stopped. I'm saying loud and clear that things have got to change, the relationship has got to change."

The press conference, which was only organised this morning, will have been prompted by fears in Downing Street that Mr Cameron has been on the backfoot over phone-hacking since the row exploded on Monday with the Milly Dowler revelations.