Rupert Murdoch's News Corporation has aggressively defended the publication of pictures of Saddam Hussein in his underpants by the Sun and the New York Post in 2005, following suggestions that the publisher of the tabloids could face investigation in the US over payments made to obtain them.

The picture was run on the front pages of both newspapers in May 2005, prompting a complaint from President Bush's spokesperson. The Sun's managing editor, Graham Dudman, admitted paying for pictures of the late Iraqi dictator in captivity that were alleged to have come from the US military.

"The Tyrant's In His Pants," said the Sun's headline, while the Post opted for "Butcher of Sagdad" against an image of Hussein wearing nothing more than a pair of white Y-fronts. Murdoch's US tabloid credited the Sun on its front page for images that were thought to date back to between January and April 2004.

News Corp said it stood by its decision to publish, saying efforts to highlight the story and link it to ongoing anti-corruption investigations in the US and the UK were just "a lame attempt to regurgitate old news".

Citing statements made by Dudman at the time, News Corp said the issue was widely reported on at the time. A spokesperson added: "We didn't believe then, and certainly don't believe now, that it was wrong to acquire and publish newsworthy photographs of a notorious war criminal."

The Sun did not dispute paying for the photographs, with Dudman saying in 2005 that the newspaper paid a small sum to secure the pictures, which it said was in excess of £500. Having done so, it acted aggressively to defend its copyright, and reports at the time suggested it was demanding £20,000 for republication.

Payments to public officials are illegal in the US and the UK, and 21 journalists at the Sun have been arrested as part of the sprawling, long-running Operation Elveden investigation into corrupt payments in Britain. The US Foreign Corrupt Practices Act bans US-owned companies from bribing public officials, and the company is under investigation by the FBI.