PM defends refusal to launch investigation into culture secretary, but sidesteps question of keeping Hunt in the job after Olympics

David Cameron has defended his refusal to launch an investigation into Jeremy Hunt, insisting the culture secretary acted "wisely and fairly", but refused an opportunity to say he would keep Hunt in his job beyond the London Olympics.

Cameron cleared Hunt minutes after the minister finished giving evidence at the Leveson inquiry on Thursday. He said he would not be referring Hunt to the independent adviser on the ministerial code, Sir Alex Allan.

Speaking on BBC1's Andrew Marr Show on Sunday, the prime minister said Hunt had always acted on the legal advice he received during the News Corp bid for BSkyB. He pointed out that the permanent secretary at the culture department, Jonathan Stephens, said Hunt had given himself "vanishingly small wriggle room" over the bid.

Cameron added that he had appointed Hunt to oversee the bid in place of Vince Cable in December 2010 after taking legal advice and with the consent of the then cabinet secretary, Lord O'Donnell. The task was transferred to the culture department after the story leaked that Cable told two Telegraph journalists posing as constituents he had "declared war on the Murdochs".

Hunt, against the advice of his civil servants, had pressed Cameron the month before to convene a meeting with Cable to back the bid, but Cameron told Marr that none of Hunt's private remarks were as favourable to the Murdochs as his known public backing for the bid. "I took the advice of the cabinet secretary, who took legal advice about it, and what he (Hunt) said publicly was more effusive, more powerful than anything he'd said privately, and on that basis I gave him the job."

Cameron said Hunt had acted entirely properly. "The advice I was given was that what mattered was not what Jeremy Hunt had said publicly or privately but how he was going to conduct himself during the bid. That's how I think we should judge him: did he adjudicate this bid wisely and fairly? And he did. He took legal advice at every stage, and he followed that legal advice and he did many things that were not in the interests of the Murdochs or BSkyB and that side of things."

Hunt had "given a good account of himself to the Leveson inquiry, he's given a good account of himself to parliament, and I think that's the key point". He added that Hunt "ran the bid very well and, I think, reached the right conclusions".

Asked whether Hunt would remain in his job until Christmas, Cameron avoided the question, confining himself to saying Hunt was "the right person" to remain in charge of making a success of the London 2012 Olympics. He sidestepped the question of whether he would remain in post after that.

There has been speculation that Hunt will offer to stand aside in a late summer reshuffle.

Asked if Hunt was safe in his job for at least the rest of the year, Cameron said: "He's got a very important job to do."

Labour is to use its opposition day debate on 13 June to demand an inquiry into Hunt's actions by Allan, the prime minister's adviser on the ministerial code.

The Liberal Democrat leader, Nick Clegg, is likely to give evidence to Leveson that day, one day before the prime minister.

A senior Conservative, Bernard Jenkin, MP for Harwich and North Essex, has also entered the row by renewing his calls for Allan to be given the power to open inquiries without the prime minister's permission.

Jenkin chairs the public administration select committee (PASC), which is preparing to "consider the matter again" the after recess.

Liberal Democrats have not said how they will vote in the debate, but it would be regarded by Conservatives as very hostile to challenge Cameron's decision on disciplining one of his senior ministers.

It is possible that Lib Dem MPs may be given a free vote.

"No decision has been taken about the opposition day motion," a Lib Dem spokesman said about the possibility of a "whipping operation" after some MPs said they believe Hunt should be investigated.

"It is a matter for the prime minister to decide how to handle issues of discipline concerning Conservative ministers," the spokesman added.

Adrian Sanders, the Lib Dem MP for Torbay, told the Observer: "The public will accept the verdict from the person who is supposed to investigate these issues far more readily than it will the verdict of the prime minister. What is the point of having an adviser on the ministerial code if you never use him?"

His colleague Lorely Burt, Lib Dem MP for Solihull, said: "I thought he (Hunt) should have referred himself, quite honestly, but he lost that opportunity."

Labour former business minister Pat McFadden, the MP for Wolverhampton South East, also waded into the row, saying on Twitter that Hunt faced serious accusations of leaking commercially sensitive information to one party in a bid which was not available to others, in breach of section 118 of the Financial Services Act.