On the evening before Gordon Brown's career-defining speech at the Labour Party conference in Manchester, he met James Murdoch, the 35-year-old who is chief executive in Europe and Asia of his father Rupert Murdoch's media conglomerate, News Corporation, and whose position includes control of the British newspaper group News International. The two men talked for nearly an hour, discussing in particular the global financial crisis. It is unprecedented for Brown to have spent so long on anything other than refining his leader's speech on the night before he delivered it. That this meeting took place when it did and for the length it did confirms what many already suspected: James Murdoch has become the most powerful figure in the British media.
Before Tony Blair became leader, Labour politicians would complain about the deep-rooted Conservatism of the British press, and with good reason. In the Eighties, only the Daily and Sunday Mirror, the Guardian and the Observer supported Labour. The Mail and Telegraph titles were robust backers of the Conservatives, as were the Daily and Sunday Express. Murdoch's market-leading publications - the Sun, News of the World, the Times and the Sunday Times - were Thatcher's cheerleaders. The Sun and News of the World continued to endorse John Major following his election victory in 1992, even as they chronicled the collapse of his fatigued and divided government. Winning the support of the Sun, in the run-up to the 1997 election, was a pivotal moment for new Labour, the culmination of a sustained campaign to woo Murdoch that began when Peter Mandelson became Labour's director of communication in 1985. This meant that a Labour administration could operate in a climate where the political weather wasn't being created by an overwhelmingly hostile press.
When Gordon Brown and his advisers first surveyed the media landscape after he became Prime Minister in June 2007, it was agreed that it was imperative they retain the support of the Murdoch titles. But there was also optimism in the Brown camp that a hostile Tory press could be neutralised. There was a feeling that old allies in the press, including the Guardian, edited by Alan Rusbridger, would embrace Brown after losing faith in Blair over the Iraq W.ar. The Guardian columnists Polly Toynbee, Jonathan Freedland and Jackie Ashley were all trenchant supporters of Brown. The Daily Mail had been vitriolic in its criticism of new Labour and of Tony Blair personally, but Brown has long enjoyed good relations with its editor-in-chief, Paul Dacre. Dacre, it is said, admires the Prime Minister's probity and moral convictions, if not his politics, and the decision to shelve the construction of several planned "super-casinos' delighted the Mail. The Daily Telegraph is broadly supportive of the Conservatives, but senior executives as well as commentators such as editor-at-large Jeff Randall and associate editor Simon Heffer are sceptical of David Cameron's social liberalism. The Sunday Telegraph is close to the Brown government; the political editor, Patrick Hennessy, is a friend of Ed Balls and he was given an exclusive interview by Brown on the eve of the Manchester conference.
Yet the tectonic plates have started to shift beneath Fleet Street. The Daily Mail leader columns still occasionally profess admiration for Brown while also fiercely denouncing his government elsewhere in the paper. Last month, the Mail also published a significant editorial in which David Cameron was acclaimed as a possible future Prime Minister. The Guardian has begun to take the Conservative revival more seriously, and Toynbee, Ashley and Freedland have turned against Brown; they now call weekly for his departure. That might explain why Brown made only a fleeting visit to the paper's late-night party in Manchester, choosing instead to spend half an hour at the rival Daily Telegraph party, where he chatted at length to its editor-in-chief, Will Lewis.
Over the summer, as the Tories built a 20-point lead in the opinion polls, the media became less sceptical of Cameron, choosing to focus instead on Brown's diminished popularity and party disunity. That became the central story around which every other political event was made to fit. In those circumstances, the Prime Minister's widely maligned press adviser, Damian McBride, deserves credit for ensuring that his employer did not receive harsher treatment from the press during his annus horribilis. McBride has been accused of briefing against members of the government, and some cabinet ministers are urging Brown to sack him, but there are some political correspondents who believe that without him the Prime Minister's position would be irrecoverable.
The Prime Minister does not have the same close relationship with James Murdoch as he does with his father. Rupert Murdoch - and his economic adviser Irwin Stelzer - respects Brown's intellect and knowledge of global economics. Last week's conversation between Brown and James Murdoch was an attempt to bring the two closer together. Sources close to the government say that Rupert Murdoch remains important to Brown internationally, pointing out that his experience and opinion is valued by other world leaders. They believe that if Murdoch told the White House that Brown was finished, he would wield far less global influence. As it is, Murdoch urges world leaders to seek the Prime Minister's advice, particularly on economic matters, which is one of the reasons Bush granted Brown a 90-minute audience in the Oval office during an unscheduled visit to Washington last week. "Murdoch's respect for Brown's understanding of the world economy is absolutely key to his ongoing respect for him," says one source. "Murdoch's critics might argue politicians are too quick to credit him with power he does not possess, but they will continue to court him as long as he remains influential on the world stage."
In an era when ideological differences between the two parties are less pronounced, personal relationships have more currency, and No 10 has worked hard to strengthen links with the press, although it is a source of frustration for some in Downing Street that Brown does not engage with members of the so-called commentariat, many of whom enjoyed regular access to Blair. The Prime Minister is, unlike his predecessor, unwilling to spend time having coffee with commentators such as Peter Riddell of the Times or Anne McElvoy of the London Evening Standard, not because he doesn't respect or like them, but because he thinks he has more important work in hand. Blair's good and open relations with newspaper commentators and opinion formers meant he could generally rely on supportive columns, even after a terrible week. Brown has not been so fortunate.
Relations with Fleet Street executives are more cordial. The Telegraph editor Will Lewis knew Brown well when he was a young Financial Times journalist and Brown was shadow trade and industry secretary. They subsequently drifted apart, but the respect remains mutual. The Prime Minister is also friendly with Murdoch MacLennan, chief executive of the Telegraph Media Group, and a fellow Scot.
Alliances with News International remain strong, thanks in large part to the work of Sarah Brown, who, in a brilliantly executed piece of political theatre, introduced her husband's main speech in Manchester. Sarah has been described as Gordon's "secret weapon", but those close to her point out that she has been carrying out an emissarial role for some time, effectively acting as an unofficial press attaché for her husband. She hosted a recent charity dinner in New York with the Sun's editor Rebekah Wade and Wendi Murdoch, Rupert's third wife. A plan to take Wade on the Prime Minister's plane to the United States was scrapped, but the Murdoch clan's close relationship with Sarah was much in evidence on the American trip. His daughter Elisabeth Murdoch, who runs her own TV production company, delivered a glowing tribute to the Prime Minister's wife at the function, which was attended by bankers, models and actresses. Wendi was seen at a private dinner at Soho House, in the Meatpacking District of Manhattan, attended by Sarah the following night. Sarah also organised a trip with Paul Dacre to see Hamlet at Stratford, and she helped plan Rebekah Wade's 40th birthday party earlier this year. As befits a former professional public relations executive, Sarah has good relations with the editors of some of the bestselling, and most influential, women's lifestyle magazines.
Further evidence of the deep ties between the government and the Murdoch family were on display earlier this month at a party to celebrate Elisabeth Murdoch's 40th birthday, held at the country home in Oxfordshire she recently bought with her husband Matthew Freud. At the gathering, Rupert Murdoch read out a message from Gordon Brown apologising for his absence, explaining that he and Sarah were with "the other Liz" in Balmoral that weekend. Etiquette may have required the PM to visit the Queen, but there is little doubt which is the more powerful family. Other guests at the Murdoch party included Tony Blair, David Miliband, the Times editor James Harding and Will Lewis of the Daily Telegraph. David Cameron was there, too, but he is still largely on the outside, waiting in hope for an endorsement from Rupert Murdoch. That Cameron's director of com munications and planning, Andy Coulson, a former News of the World editor, is a member of Cameron's inner circle may help to change that. Steve Hilton, Cameron's director of strategy, has wide influence, but he has few direct dealings with the press and, in any event, is living in California (his wife works for Google). James Murdoch's friendship with the shadow chancellor George Osborne, whose social liberalism is consistent with his own, may ultimately have more influence on the Murdochs' position - and, by implication, that of their British newspapers - on the Tories.
But are we at the end of an era? The next election may be the last at which national newspapers exert such a decisive influence over the way the country votes. Although newspapers still reflect the nation's mood, and help to shape it, sales figures suggest they are no longer as powerful as they once were. The combined circulation of daily newspapers (excluding the Daily Star) has fallen from 11.3 million to 9.68 million since the last general election; the decline since 1997 is even more pronounced. Those circulation figures obviously do not take account of the growing power and influence of newspaper websites, or the startling transformations media groups have made in their online operations in the past year, but no one doubts that the information industry is fragmenting.
Unlike in the US, where sites such as the Huffington Post and the Drudge Report often break stories followed by the national media, this country has not produced a truly influential online commentator with power to set the news agenda, though bloggers such as Iain Dale and Guido Fawkes are read. They are both right-of-centre commentators, and it is notable that the left has been particularly slow to harness new technology, as Barack Obama has done so successfully in the US.
The internet has changed the news cycle, rendering front-page exclusives out of date long before they are read. Newspapers looked slow and flat-footed when they told readers last week that the US treasury secretary Hank Paulson had won support for his $700bn bailout deal hours after it was scuppered by Congress. Broadcasters, now regarded as more important than the press by No 10, still take their lead from Fleet Street, however. The BBC regularly follows Daily Mail scoops, although senior BBC sources say they uncover enough stories of their own and follow newspaper exclusives regardless of where they are published.
There is some disgruntlement at No 10 about new arrivals at the BBC, which is placing former Conservative supporters in executive roles, such as John Tate, the BBC's new director of policy and strategy, and hiring senior producers on flagship programmes in anticipation of a change in the government. Tate, who formerly ran the Opposition Policy Unit, co-wrote the 2005 Tory manifesto with Cameron. But a senior BBC News executive says the atmosphere of mutual distrust between the corporation and spin-doctors in both parties has been replaced by one of co-operation. When Cameron visited Georgia, the Tories were eager for the BBC to cover his press conference. But, instead, its camera crews and reporters were employed at the border, where Russian tanks were advancing. A polite conversation explaining that covering the conflict had to take priority was enough to assuage complaints, according to one BBC News executive, even if some programme editors tell a different story. Many describe Coulson as "a shouter" and claim he has tried to exert control over the questions Cameron is asked in interviews, though he ensured that the BBC's political editor Nick Robinson had unfettered access to the Tory leader for a Panorama special screened on Monday 29 September. There is no doubt that Coulson has professionalised the Conservatives' media operation. Senior Tories who seldom ventured into daytime TV studios now regularly appear on the GMTV sofa, for example.
With the rest of Fleet Street neatly divided along party lines, with the possible exception of Roger Alton's Independent and the Financial Times, the value of a Murdoch endorsement is magnified. Some observers believe it is inevitable that the Murdoch newspapers will ultimately support the Tories if they retain their poll lead as an election approaches, citing the old adage that Murdoch "only ever backs winners". But senior News International executives counter by saying that its four titles have never backed the same party, and a senior source at the Times insists he has little idea which party his paper, or the other titles, will come out for. Intriguingly, he adds that much will depend on who leads the Labour Party into the next election. If Brown is deposed, his successor may have to fight harder than the current Prime Minister to win Murdoch's backing.
In the meantime, the global financial crisis has provided Fleet Street with a dramatic new narrative, and boosted Brown's standing in the opinion polls. At the Conservative Party conference in Birmingham, some delegates muttered that the unprecedented turmoil in the markets might prove to be Brown's equivalent of the Falklands War: a crisis that offers an opportunity to reclaim lost credibility and restore his electoral appeal. Much has been written about the power of the Murdoch newspapers, and Rupert Murdoch's willingness to use his papers to promote and protect his commercial interests. But at a time of international emergency Murdoch is likely to support only those politicians whom he believes are best placed to deal with the crisis. Perhaps that is what Gordon Brown and James Murdoch were discussing last week.
James Robinson is media editor of the Observer