Downing Street is at war with the Daily Telegraph after the paper once known as the house journal of the Conservative party alleged that the prime minister's director of communications issued a threat over a story about culture secretary Maria Miller's expenses.
In a blow to No 10's attempts to negotiate a deal over the Leveson report into press ethics with Britain's national newspapers, the Telegraph accused Craig Oliver of highlighting the role played by the culture secretary in dealing with the report's recommendations.
Tony Gallagher, the Telegraph editor who has been involved in the negotiations with Miller over the implementation of the Leveson report, ordered the publication of details of a private conversation with Oliver. The newspaper reported that Oliver had said in a telephone call with Gallagher last Friday that the article about her expenses might be badly timed because "she [Maria Miller] is looking at Leveson at the moment".
The newspaper published brief details of the conversation on Wednesday afternoon on its website following an article in its overnight print edition which said Miller's special adviser had asked it to consider the minister's role in implementing the Leveson report before publishing details of her expenses.
The paper reported Joanna Hindley as saying that she wanted to "flag up" Miller's role in negotiating with the Telegraph editor and other national newspaper editors who are pushing for the implementation of the Leveson principles without having to resort to parliamentary legislation.
Hindley reportedly told a Telegraph reporter last Thursday: "Maria has obviously been having quite a lot of editors' meetings around Leveson at the moment. So I am just going to kind of flag up that connection for you to think about."
The Telegraph reported on Monday that Miller had claimed more than £90,000 in expenses for a second home in south-west London, which she described as her parents' home for "nearly two decades".
The newspaper reported that the claims "would appear to be at odds with parliamentary rules" after the former Labour minister Tony McNulty was reprimanded for allowing his parents to live in his second home, which was subsidised by the taxpayer.
The report appeared the day before Miller published the government's plans for equal marriage. The newspaper has been campaigning against the policy.
Downing Street hit back at claims that Oliver had attempted to use Miller's role in the Leveson negotiations to intimidate the Telegraph. One source said the No 10 director of communications had called Gallagher because Miller's elderly father had been upset after being approached at his home by a Telegraph reporter. At that stage, the newspaper had reportedly not approached Miller or her office about the allegations regarding her expenses.
Oliver, who had been called by Miller late on Thursday night after an upsetting conversation with her father, told Gallagher that it was up to the Telegraph how to report the story. But he told Gallagher that Miller was upset about the treatment of her father during a busy period for her. Oliver also suggested that the Telegraph could have contacted Miller rather than doorstep her elderly father.
Gallagher reportedly asked whether the conversation with Oliver was private and then apologised for the upset caused to Miller's father, a point he repeated in an email to the culture secretary over the weekend. One source said the conversation ended at this point and Oliver heard nothing more until the Telegraph reported on Wednesday afternoon that he had issued a threat to the paper.
One source said: "Craig did not threaten the Telegraph over Leveson. He was not contacted before the Telegraph published its allegations about him. He was trying to raise concerns about the treatment of an elderly, infirm man who was upset."
The source confirmed that Oliver did mention the Leveson negotiations in the context of stressing how upset Miller was at a busy time. Asked whether Oliver had mentioned Leveson as a way of putting pressure on the Telegraph, the source said: "He would not do anything that crass. The government has been very clear that it wants to avoid statutory legislation. There is no change to that position."
The intervention by Miller's special adviser prompted Dr Evan Harris, the former Liberal Democrat MP who is a leading figure in the Hacked Off campaign, to call for Miller to recuse herself from the Leveson negotiations. Speaking before the publication of the allegations about Oliver, he described the intervention by Miller's special adviser as "astonishing".
Brian Cathcart, the executive director of the campaign group, later issued a more emollient statement: "The direct involvement of ministers in these secret negotiations means no one can be confident that the public's interests are being served rather than the interests of the editors and proprietors, or of the politicians."
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