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From The Guardian:

John Major accused Rupert Murdoch of trying to use his newspapers to force his government to change its policy on Europe...

The former Conservative prime minister told the Leveson inquiry on Tuesday that Murdoch delivered the ultimatum at a private meeting three months before the 1997 general election which the Tories lost heavily to Labour.

...

At a private dinner also attended by his wife and Murdoch's daughter Elisabeth, Major said Murdoch wanted Britain to withdraw from the European Union and said he made it clear to him that was not going to happen.

http://www.guardian.co.uk/...

And lo and behold, three months later, Rupert's tabloids switched their backing to the Labour Party and helped elect Tony Blair (h/t Califlander).
This testimony strikes me as devastating - it shows a wildly arrogant Murdoch trying to tell the freaking Prime Minister to make a drastic policy change. This can't be pinned on Culture Secretary Hunt, or Rebekah Brooks, or anyone except the CEO himself, Rupert Mudoch - the one who delivered the threat personally.

In other news, current P.M. David Cameron is appearing today at the Leveson Inquiry. He is reportedly planning to say his administration goofed in its handling of the BskyB bid. It will be interesting to see the extent to which he may try to protect Rupert.

Here's a schnib from Brit's piece in the Daily Beast, regarding Cameron's upcoming testimony:

All the dramatic strands now converge on Cameron. He employed the former News of the World editor Andy Coulson, recently charged with perjury, as head of communications for the Conservative Party in 2007, and then brought him in as chief spokesman for the whole government in 2010. Cameron also was close friends for many years with former News International CEO Rebekah Brooks, charged with three counts of perverting the course of justice, and allegedly went riding on Raisa, a retired police horse, loaned to Brooks by her friends at the Met, and signed off texts messages to her with LOL, thinking this meant “lots of love.”

Even more important in this third module, which increasingly has focused on the BSkyB takeover, is Cameron’s appointment of Culture Secretary (Jeremy) Hunt, a known “cheerleader” for Rupert Murdoch, to oversee the bid in a “quasi-judicial” capacity, after having just sacked Business Minister Vince Cable for being too “partial” against it. As the forced disclosure of hundreds of meetings, emails, and texts have made clear, senior Conservative politicians and advisers were in contact almost daily with senior News Corp. executives during the adjudication of Britain’s biggest media merger. One former senior News International employee told The Daily Beast that at that time “the Court of Cameron and the Court of Murdoch became almost totally enmeshed.” This has caused one of the biggest rifts in the coalition government since its formation, with the Liberal Democrats abstaining in a Labour forced vote Wednesday afternoon criticizing Hunt for breaking the ministerial code.

http://www.thedailybeast.com/...

Update 1:

Sky News has an article up about Cameron's imminent testimony. Because it is a Murdoch-owned media entity, it can be read several different ways:

Senior Government insiders claim that when he appears before Lord Justice Leveson Mr Cameron will make clear that the Government will not adopt new plans for regulating the press that stifle freedom of speech.
The Prime Minister is expected to follow the tone of Education Secretary Michael Gove, a fierce critic of the Leveson inquiry, by stressing that Press freedom must be preserved at all costs.
...
Mr Cameron is expected to face proving questions about his friendship with former newspaper boss Rebekah Brooks, after she said he texted her regularly and often signed off his text messages to her with 'LOL', which he wrongly believed stood for 'lots of love'.
http://news.sky.com/...

Update 2:

Well, it appears Cameron has given his testimony - not sure if it's over yet, but here's some icky stuff from The Telegraph:

The second hour of the PM at Leveson has demolished his attempts to rise above low politics. The cloying, sugary text from Rebekah Brooks on the eve of Mr Cameron's 2009 conference speech ("I am so rooting for you tomorrow not just as a proud friend but because professionally we’re definitely in this together! Speech of your life? Yes he Cam!") speaks of a deeply cosy relationship between the PM and a Murdoch lieutenant. Her suggestion of discussions over a "country supper" is likely to emerge as another symbol of a gilded clique of Conservatives and media executives.
The text emerged after details of Mr Cameron's extensive contacts with the Murdochs in opposition, ranging from dinner on yacht in Greece to a tip-off in 2009 that the Sun would abandon its support for Labour during the Labour conference.
Throughout this evidence, we saw something very rare: David Cameron looking nervous. Wary and watchful, the PM wriggled visibly on questions about his weekend meetings with Mrs Brooks in Oxfordshire. ("I don't think every weekend…") Why is Mr Cameron worried? Because he knows that, even allowing for voters' cynicism about politicians wooing the media, the extent and nature of his entanglement with the Murdoch empire (and its more legally controversial figures especially) can do him real harm.
http://blogs.telegraph.co.uk/...

Update 3:

A high-ranking UK police officer has just been arrested in connection with Operation Elveden (h/t AnnetteK):

A serving officer of superintendent rank, from City of London Police, has today been arrested by the Independent Police Complaints Commission (IPCC) on suspicion of misconduct in public office.

The arrest is the result of information passed to the IPCC by the Metropolitan Police Service team investigating Operation Elveden.

It relates to the alleged passing of unauthorised information to a journalist.

http://www.itv.com/...

Update 4: (h/t ceebs)

It wasn't just the police officer. It turns out FOUR people were just arrested, including a journalist for Murdoch's The Sun:

A Sun journalist, a serving police superintendant and two other people were arrested today over alleged corrupt payments to public officials.
Reporter Neil Millard, 31, was being questioned by detectives following a dawn raid on his home in Croydon, south London.
Police also swooped on the unnamed City of London officer, a40-year-old former prison officer and a 37-year-old woman, from Corby, Northamptonshire.
http://www.dailymail.co.uk/...
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