FOR many politicians in his native Australia, Rupert Murdoch's declaration to Der Spiegel last week that he could 'even imagine' supporting Tony Blair, the Labour Party leader, had a chilling ring of familiarity. Murdoch's overtures to Labor Party politicians in Australia have always come at a price and have sometimes turned out to be dangerously mercurial.

The Murdoch-Labor relationship here has a turbulent history, the bottom line of which is less to do with political principle than with Murdoch's desire to keep expanding his commercial empire. Even as Murdoch was sending out feelers to Blair, Australia's Labor government, headed by Paul Keating, was making the first signals that it may be prepared to change its sacred cross-media ownership laws to suit him.

These rules prohibit proprietors of newspapers from controlling television stations in the same city. With 65 per cent of Australia's newspaper market under his control, including leading titles in every big centre, Murdoch is unable to expand, beyond his minority stake, in non-cable TV. He is also a member of a consortium, with fellow media magnate Kerry Packer, that is bidding to join Australia's fledgeling pay-television industry.

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Ken Cowley, chief executive of Murdoch's Australian empire, recently called on Canberra to amend the cross-media rules in view of the developments in electronic technology. Having categorically ruled out such changes, Michael Lee, the Minister for Communications, surprised everyone last Sunday by saying that the government would be 'silly' not to review the rules: 'As the environment is changing, we need to have a look at what's happening.'

It was a measure of the pressure the government is under from the media titans. If the rules do begin to crumble, then Murdoch will surely regard his public flattery of Labor during its 11 years of power as a worthy investment. Since he established himself as a newspaper proprietor in Sydney 30 years ago, Rupert Murdoch has unashamedly used such flattery to back political winners, only to dump them when he was convinced that they were washed up or that his newspapers might be left dangerously stranded on the losing side of politics.

The most notorious example was his brief flirtation with Gough Whitlam, who led Labor to power in 1972, displacing the Liberal(conservative) government after 23 years. The circumstances were roughly analogous to those in Britain in 1994: a tired, ailing conservative administration with which voters were disenchanted, and a revamped Labor opposition with a personable, intelligent leader offering new ideas.

A year before the 1972 campaign, Murdoch invited Whitlam to dinner at the Hungry Horse, an aptly titled Sydney restaurant where Murdoch was a habitue. 'How do we get rid of this government at the next elections?' he asked his guest. Murdoch donated money to Labor's campaign and even helped design its press advertisements. When Whitlam won, Murdoch claimed he had 'single-handedly put the present government into office' - a grandiose claim echoed by the Sun after John Major's victory last year.

George Munster, in his Murdoch biography, A Paper Prince, saw the 1972 action as establishing a consistent future pattern: 'He would henceforth support the only alternative on offer and he wanted to be sure that Whitlam would become a personal friend . . . he was convinced that he was sitting at the incoming Prime Minister's elbow.' Others saw it differently at the time. Bob Hawke, then president of the Australian Council of Trade Unions, warned Whitlam: 'You're going to regret the day you got into bed with Rupert.'

He was right. When the Whitlam government disintegrated three years later, amid scandals and economic mismanagement, Murdoch turned his newspapers vitriolically against it. Although public opinion against Whitlam was already running high, the impact of the Murdoch campaign contributed to Labor's crashing 1975 election defeat.

For the next eight years, Murdoch supported the federal conservative government under Malcolm Fraser, who, like him, came from the heart of the Melbourne establishment. Simultaneously, the state Labor government of New South Wales, in 1979, awarded the licence to run a lucrative gambling game, Lotto, to a consortium in which Murdoch and Packer had strong interests. By 1983, Fraser's government was on the skids. Bob Hawke, now a populist Labor Party leader, was headed for victory in a snap election that year. Murdoch moved quickly to disestablish himself as Labor's ogre.

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He offered time for a Fraser-Hawke debate on his television network, and allowed himself to be photographed escorting Hawke from the studio afterwards. Six months after Labor's 1983 victory, when it was clear that Hawke and Paul Keating, then Treasurer (finance minister), were embarking on a radical economic shake-up guided by a free market credo, Murdoch publicly ditched Fraser: 'The poor chap is miserable . . . he's running around the world with other ex-heads of government telling present ones how to do their job.'

Fraser had done Murdoch, then still an Australian citizen, a big favour in 1981 when he passed what became known as the 'Murdoch amendment' to the broadcasting laws. This replaced a rule which prevented a television licence from being held by a non-Australian resident with one which simply disqualified non-citizens. It enabled Murdoch to retain his TV network, though when he later became a US citizen he was obliged to divest his Australian television interests.

The presentcross-media ownership rules, which Keating pushed through parliament in 1986, were aimed squarely at the main Murdoch-Packer competitors, the former Fairfax and Melbourne Herald empires, which the Labor government regarded as its real enemies.

The new rules enabled Murdoch in 1987 to take over the vast Melbourne Herald group, which his father once ran, and to achieve an unprecedented domination of Australia's newspaper industry. To the continuing discomfort of centre-left Labor MPs, who still remember his turncoat tactics against Gough Whitlam, Murdoch and Packer became embraced as business 'mates' of the Labor government during the Eighties. Bob Hawke had conveniently forgotten his old warning.

Whitlam, who remains bitter to this day over what he regards as Murdoch's betrayal, declined to comment on the transformation. Barry Jones, a former Hawke government minister and now Labor Party president, said: 'Murdoch's reactions are personal rather than political. He's impressed by movers and shakers, and distinctly unimpressed by those who seem to have run their course.' Most of Murdoch's papers have supported Labor in three of the four elections that it has won since 1983. At last year's election, with every poll predicting a Labor defeat, almost all were anti-Labor.

Since Keating's unexpectedly comfortable election triumph last year, Murdoch's papers have been generous to Labor. Paul Chadwick, a lecturer in media law and author of the book Media Mates, believes that Murdoch's see-sawing political stances are entirely pragmatic. 'He's always been prepared to back winners just before they win, and to shift allegiances on non-ideological grounds. It's the gambler in him.' So far, this gambling instinct has got Murdoch almost anything he has ever wanted in Australia, with no government willing to risk standing in his way.

With Packer as a supporter, he is now poised to bring pressure in Australia on Conrad Black, who controls the rival Fairfax newspaper group and who has few friends in the Labor power structure in Canberra. Since Keating is once again leading opinion polls and the opposition Liberals are in disarray, no one is expecting any fresh shifts from Murdoch in the near future.

(Photograph omitted)