LONDON (Reuters) - MP Tom Watson, an outspoken critic of Rupert Murdoch who played a prominent role in exposing phone hacking at his British newspaper business, said on Tuesday politicians had been scared of being targeted by the media mogul's tabloids.
Watson, a member of the opposition Labour Party, said ministers and members of Parliament (MPs) had been unwilling to take on Murdoch's News International because of its "mystique" and the threat of "ridicule and humiliation."
"I think they closed their minds to the potential for a major scandal at one of their key outlets for their message," Watson told a public inquiry into media ethics headed by senior Judge Brian Leveson.
"I think the personal relations between politicians and the people at the company were fibrous and close so they couldn't divorce their objective thinking. And I think they were frightened," he added.
Watson was speaking shortly before MPs agreed to refer three former Murdoch executives to a parliamentary watchdog over allegations they misled a legislators' inquiry into phone hacking.
MPs on the Standards and Privileges Committee will consider whether to sanction ex-News International chief Les Hinton, the now defunct News of the World's former top lawyer Tom Crone and the tabloid's last editor Colin Myler.
An all-party committee investigating phone hacking, which concluded this month that Rupert Murdoch was not fit to run a major international company, said the former executives had given it misleading evidence, a claim all three deny.
However, Parliament's powers of sanction over members of the public are unclear - the last time the lower House of Commons imposed a fine was in 1666 and it has not summoned a private individual for a reprimand in front of lawmakers since 1957.
THE MURDOCH 'MYSTIQUE'
At least a dozen MPs had been fearful of having details about their personal lives or past political decisions printed in Murdoch's papers, Watson said.
Watson, who has co-authored a book about Murdoch "Dial M For Murdoch: News Corporation and the Corruption of Britain," has been called Murdoch's "tormentor in chief" by the press.
During a parliamentary committee hearing, Watson characterized Murdoch's son James, the former executive chairman of News International, as "a mafia boss," and Leveson said he was not "dispassionate" about phone hacking.
After a private detective and the royal reporter at the News of the World were jailed in 2007, Watson became one of the most high-profile campaigners to call for further investigation into phone hacking.
He argued that the matter had not been treated seriously enough by police, nor by his parliamentary colleagues and most of the media, and that News International had covered up the issue.
It was only after police reopened their investigation in January last year and the revelations about hacking in July that the matter developed into a political storm.
The inquiry has already heard about the close relationship between former News International Chief Executive Rebekah Brooks and a succession of prime ministers, including Tony Blair and David Cameron.
"There was a sense there was a mystique about the News International stable, that they had unique access to Downing Street, for a minister that was important and the way you were portrayed in the News International papers was important," Watson said.
He added that he himself had been targeted by the News of the World and put under surveillance by its chief reporter, now at Murdoch's Sunday Times, over mistaken claims he was having an affair.
He also told the inquiry that former Premier Gordon Brown had called him to say Murdoch had told Blair to call him off the phone hacking inquiry. Murdoch and Blair deny the conversation while Brown says he cannot remember it.