David Cameron's former spin doctor has denied any "grand conspiracy" between the Government and Murdoch empire as he gave evidence to the Leveson inquiry.
But Andy Coulson admitted that he failed to declare a £40,000 shareholding in News Corporation while he was in Downing Street.
He also disclosed that Mr Cameron did not directly challenge him about his knowledge of phone hacking at the News of the World after July 2009, despite a stream of revelations indicating the problem went deeper.
The details emerged as Mr Coulson spoke publicly for the first time since being arrested on suspicion of phone hacking and corruption last year. He has been released on police bail while the investigation continues.
Mr Cameron faces fresh embarrassment on Friday when ex-News International chief executive Rebekah Brooks takes to the witness box. She is expected to be grilled about her close relations with the premier who reportedly texted to express sympathy when she was forced to quit.
The former journalist was asked about Mr Cameron's admission last July that politicians and the media had become "too close". He said the premier had not expressed similar regret in private before that.
Mr Cameron "frequently" expressed frustration about the amount of time he needed to spend with figures from the media. But one exception appears to have been Ms Brooks, whose husband Charlie was a contemporary of Mr Cameron at Eton, with Mr Coulson saying: "She was his constituent. Charlie Brooks is a constituent of his, so they lived relatively close to his constituency home but there was, I think, a fairly long historic family connection."
Questioned on whether he had seen any contacts he regarded as too close, Mr Coulson responded: "I look at it from the perspective of whether or not there was improper conversations or a deal done, which I think is all part of this sort of grand conspiracy that sort of sits over this idea. I never saw a conversation, was party to a conversation that to my mind was inappropriate in that way."
Mr Coulson dismissed rumours that he had kept a potentially explosive diary of his time in the job. And he sought to play down the closeness of his personal relationship with Mr Murdoch.
Downing Street said civil servants were required to inform their permanent secretary of "any business interests or holdings of shares or other securities which they would be able to further as a result of their official position".