Rupert Murdoch once asked the Major government to change its policy on Europe, or risk losing the support of his newspapers, Sir John Major has claimed.
The former prime minister told the Leveson Inquiry into media ethics the request was made during a dinner he hosted for Mr Murdoch and his wife prior to the 1997 general election.
Sir John said he clearly remembered the conversation. "It is not very often someone sits in front of a prime minister and says to a prime minister, 'I would like you to change your policy, and if you don't change your policy my organisation cannot support you'," he said.
"Mr Murdoch said that he really didn't like our European policies," Sir John told inquiry chairman Lord Justice Leveson. "That was no surprise to me."
He went on: "He wished me to change our European policies. If we couldn't change our European policies his papers could not and would not support the Conservative Government.
"As I recall he used the word 'we' when referring to his newspapers. He didn't make the usual nod towards editorial independence."
Sir John told the inquiry: "There was no question of me changing our policies."
News International publications went on to support Labour leader Tony Blair in the 1997 campaign.
Sir John said he was not surprised by that move. There was laughter in court 73 at the Royal Courts of Justice in London as the former prime minister went on to recount an old joke he used to tell.
"I used to say I'd gone for a swim in the River Thames and left my clothes on the riverbank. When I returned, Tony Blair was wearing my clothes."
A News International spokesperson responded: "News International titles did not act in unison in the 1997 election. The Sunday Times supported John Major, The Times was neutral, and The Sun and the News of the World supported Labour."
In April, Mr Murdoch told the Leveson Inquiry: "I have never asked a prime minister for anything."
He added: "If any politician wanted my opinions on major matters, they only had to read the editorials in The Sun."
Sir John echoed previous political and celebrity witnesses in stressing there were some "very good" parts of the British press and some parts that were "not very good at all".
He said: "Bad journalism is a cancer in the journalistic body, but is not the journalistic body as a whole."
Sir John admitted he had personally struggled with the negative press coverage he had received during his time in office.
Asked if it was true he had been "too sensitive" at the time, he replied: "It certainly would be. I would not deny that at all.
"I was much too sensitive from time to time about what the press wrote. God knows why I was but I was.
"It was a basic human emotion to get a bit ratty about it."
He said he thought too close a relationship with the press was "rather undignified".
"I thought a relative distance between the press and the Government, particularly myself, was a good idea," he told the inquiry.
"I don't think it is the role of the Prime Minister to court the press and I think it is a little undignified if it is done too obviously," he added.
Sir John's successors in the role of prime minister have all been accused of being too close to parts of the media, in particular the Murdoch press.
Both Tony Blair and Gordon Brown have had their say before Lord Justice Leveson and denied that relationship was too close.
In an angry and at times emotional appearance at the inquiry, Mr Brown denied he had "declared war" on Rupert Murdoch in a telephone call and behaved aggressively to former News International chief executive Rebekah Brooks .
The former prime minister said a conversation where he was alleged to have acted "in an unbalanced way" as well as threatening Mr Murdoch never took place.
Labour leader Ed Miliband's evidence followed that of Sir John's.
He told the inquiry he would offer cross-party support to try to implement Lord Justice Leveson's eventual recommendations on press reform.
Mr Miliband said there had been a "failure to get to grips with these issues" by the press, police and politicians.
"There is clearly something which has gone very wrong with the way parts of the press dealt with individuals," Mr Miliband told the hearing.
He added: "Organisations like News International had huge power and I think politicians were reticent to speak about some of these practices that were exposed.
"I include myself in that."
The Labour leader said the Murdoch empire's dominance of the British media fuelled its "arrogance".
He said News International had "a sense of power without responsibility" because of its 37% share of the newspaper market and its stake in BSkyB.
He told the hearing he had met Rupert Murdoch at a News Corporation summer party in June 2011.
"I believe I should have raised the issue of phone hacking with him," he added. "I didn't."
Mr Miliband said he wanted to see a cap on media ownership and suggested it should be set lower than the proportion of the market currently owned by the Murdoch empire.
He had "no worries" about a company owning 20% of the British market, he said, but it was a "question of between 20-30%".
News International held 37% of the market until the closure of the News of the World but still retains a 34% share, the inquiry was told.
Labour's deputy leader and shadow culture secretary, Harriet Harman , gave evidence after Mr Miliband.
The pair have led Labour's calls for the sacking Jeremy Hunt , the Culture Secretary, over his role in the controversial News Corporation bid for BSkyB.
Asked about the bid on Monday, George Osborne told the inquiry he did not have a "strong view about its merits" either way and suggested the decision to give responsibility for the deal to Mr Hunt was made on the recommendation of Downing Street's then-permanent secretary Jeremy Heywood.
Pressed about his role in News Corp's bid for BSkyB, Mr Osborne suggested the decision was either going to offend one media camp or another.
"I regarded the whole thing as a political inconvenience and something we just had to deal with, and the best way to deal with it was to stick to the process," he said.
On Wednesday, the inquiry will hear evidence from Deputy Prime Minister Nick Clegg and Alex Salmond, Scotland's First Minister, who has been criticised over his contact with Rupert Murdoch .
Then it will be the turn of current Prime Minister David Cameron - who gave the go-ahead for the inquiry in the wake of the phone hacking scandal and closure of the News Of The World newspaper.
He is likely to be quizzed on his close friendship with Mrs Brooks, the cosiness of the so-called "Chipping Norton set" and how he came to ride a retired police horse at the stables of Mrs Brooks' racehorse trainer husband Charlie, an old Etonian school friend of the Prime Minister.
