By Kate Holton and Michael Holden
LONDON (Reuters) - British Prime Minister David Cameron gave a former tabloid newspaper editor whom he hired as his top spokesman access to some of the government's most sensitive secrets while he did not have full security clearance, an inquiry heard on Thursday.
Andy Coulson, a former editor of Rupert Murdoch's News of the World, told a government-ordered investigation into press standards that Cameron's Conservative Party had asked few questions about his past had not carried out full security checks.
Coulson took up the role as the Conservatives' director of communications, helping steer Cameron's bid to become prime minister, just six months after he stood down as editor of the now-defunct Sunday paper following the jailing of one of his reporters for phone hacking.
Critics says Cameron appointed Coulson in order to secure the backing of the journalist's former boss, Murdoch, and say the appointment showed a lack of judgment.
"Did you have any unsupervised access to information designated top secret or above?" Robert Jay, the lead lawyer for senior judge Brian Leveson, asked Coulson.
"I may have done, yes," he said.
"Did you ever attend meetings of the national security council?" Jay asked about a body of senior politicians, defense and intelligence chiefs which is chaired by the prime minister.
"Yes," Coulson told the public inquiry, which Cameron ordered last year after the phone hacking scandal spiraled out of control, forcing Murdoch to close the News of the World.
A full security clearance procedure includes a review of the applicant's finances and detailed interviews about their past.
Coulson told the hearing on Thursday that he had owned shares in Murdoch's News Corp while he worked for Cameron, an issue he said could raise the potential for a perception of a conflict of interest.
He denied any 'grand conspiracy' between media tycoons and senior politicians but did say that the fallout from the phone hacking scandal was forcing politicians to distance themselves from journalists and media bosses.
NO 'GRAND CONSPIRACY'
The involvement of Coulson and another former editor - Cameron's friend Rebekah Brooks - turned the long-running hacking story into a national political scandal that has laid bare the close ties between senior politicians, the police and the media.
Coulson, appearing relaxed throughout the hearing, was asked repeatedly why Cameron and future Finance Minister George Osborne would have wanted to take on Coulson when they were in opposition, with lawyer Jay suggesting that they were trying to secure the backing of Murdoch's newspapers.
"I want to make it quite clear that there was never any inappropriate deal between the papers and the party," Coulson said. "There were no conditions or contingencies suggested or levied in return for a newspapers' support."
The left-leaning Guardian newspaper, which broke the phone hacking scandal, has said it warned Cameron against employing Coulson, citing information it had but was unable to publish for legal reasons.
And an updated biography of Cameron, serialized this week in the Times newspaper, reports that aides to the royal family warned the prime minister that Buckingham Palace also did not think the appointment of an editor of such a salacious paper would be an appropriate move.
Coulson had edited the News of the World when its royal reporter went to jail for hacking the phones of staff working for Princes William and Harry.
In May 2010 however, Coulson moved with Cameron into Downing Street to act as the Prime Ministers official spokesman, winning early plaudits for giving the wealthy and privileged Cameron a better understanding of the average voter.
With the allegations about phone hacking refusing to die down, and the link to Cameron becoming ever more damaging, Coulson left Downing Street in January 2011 saying: "When the spokesman needs a spokesman, it's time to move on."
He has since been arrested over allegations of phone hacking and bribery.
Asked whether senior members of the Conservative Party asked Coulson about his links to the phone hacking scandal, he said: "I don't remember but it's possible." Coulson has said he did not know about the phone hacking but left the tabloid because he felt he had to take ultimate responsibility.
(Editing by Giles Elgood)