LONDON (Reuters) - Rupert Murdoch did not ask Margaret Thatcher to bend the rules to allow him to buy the Times of London in 1981, one of his lawyers said on Monday, dismissing theories of a deal as "science fiction".
Lawyer Rhodri Davies said the media mogul had nothing to hide and rejected as baseless an accusation that Murdoch was suffering from "selective amnesia" when he said he had forgotten a 1981 meeting with the former British prime minister.
"The suggestion that he must be lying is not an argument or a theory based on evidence, but a conviction," Davies told an inquiry into press ethics, whose lead prosecutor Robert Jay made the accusation last week.
"In the absence of any such evidence, Mr Jay opened up instead what one can only describe, with respect, as a science fiction theory, that deals were done not expressly but through implied messages," he said.
Murdoch's acquisition of the Times is considered by some critics as a paradigm of how he exercises political influence, allegedly promising the support of his tabloids for politicians in exchange for their supporting his often controversial business deals.
Last month, documents handed to the inquiry showed that a British government minister had given highly sensitive information to News Corp executives to help the company's intended $12 billion acquisition of BSkyB.
The minister, Jeremy Hunt, has denied giving News Corp special treatment and is resisting opposition calls for his resignation. A senior aide to Hunt resigned the day after the documents were read out in court.
News Corp was forced to drop its bid for the pay-TV operator after a phone-hacking scandal at its News of the World tabloid spiraled out of control last July when it was revealed that it had hacked the voicemail of murdered schoolgirl Milly Dowler.
Relations between Prime Minister David Cameron's coalition and Murdoch have noticeably cooled since then, and the Murdoch press has become aggressive in its criticism of the government.
Davies said there was no evidence of either an explicit or an implicit deal with Thatcher, whom Murdoch publicly admired, and mocked prosecutor Jay's suggestion last week that a deal could have been done without anything being said.
"Deals cannot be done by telepathy," he told the Leveson Inquiry, a judge-led probe into press ethics that was ordered by Cameron at the height of the phone-hacking scandal last July.
"This is the stuff of fantasy," he said. "The sophisticated and powerful people Mr Jay identifies know better than to commit their political and commercial capital without a clear definition of what they are getting in return."
Murdoch's News Corp bought the Times and the Sunday Times in 1981 from Canada's Thomson Corporation, which had threatened to shut down the titles for good after a bitter and long-running dispute with labor unions.
The deal with Murdoch, who already owned the Sun and the News of the World and beat other potential suitors including media tycoon Robert Maxwell, was never referred to Britain's Monopolies and Mergers Commission.
Davies said Murdoch had been willing for the matter to be referred but that there had been no time because the Thomsons had refused to extend their deadline for shutting the newspapers.
Murdoch discussed his proposed acquisition with Thatcher at the prime minister's country residence, Chequers, during a private lunch meeting that was only revealed in March of this year to have taken place.
He has said he has no recollection of the meeting, which took place less than three weeks before the acquisition was agreed.
"Could an intimate lunch at Chequers really have been forgotten?" prosecutor Jay asked in a submission to the Leveson Inquiry last week. "One does at least have to ask whether this is selective amnesia."
Davies called this a "desperate assertion" and accused Jay of making up a story to support his theory of underhand deals, since there was no evidence to support it.
(Reporting by Georgina Prodhan; Editing by Andrew Osborn)