Former Senator Bill O'Chee has had a difficult relationship with the Murdoch press. Credit:Paul Miller The claims came to light during a conversation at an Australian airport this year between Mr O'Chee and a sitting MP involving the News of the World phone hacking scandal. During that conversation the MP said they doubted anything similar would be unearthed during Australia's independent media inquiry. Mr O'Chee then relayed the alleged incident. The conversation was brought to the attention of the federal police last month, and the matter is now being investigated by the AFP's special references unit, which deals with sensitive political probes. Mr O'Chee has also provided a statement to the AFP. Yesterday a spokesman for the federal police confirmed the investigation. ''After receiving a referral, the AFP commenced an investigation on 4 November, 2011, in relation to these allegations.''

The claims centre on proposed legislation regarding the creation of digital television in Australia, specifically a bill called the Television Broadcasting Services (Digital Conversion) Bill. News, Fairfax (owner of The Age), Telstra and Optus were opposed to the digital conversion legislation because it proposed to give the free-to-air broadcasters up to six new channels each for free as part of the move to digital television. It also proposed a ban on new television stations for 10 years, protecting the existing operators. In 1998 the Senate was finely balanced with two independents - Labor defector Mal Colston and Brian Harradine - holding the key to whether the bill would pass.

The Howard government supported it; Labor had said it would oppose it. Mr O'Chee was a member of a Senate committee involved in scrutinising the bill and was seen as a weak link in Coalition support for it as he had previously crossed the floor on other bills, defying his party in the process. In the end, Labor secured some amendments and supported the legislation, making the independents irrelevant. But there was a frenzy of lobbying in the weeks before the bill arrived in the Senate, with the vote expected to go to the wire. Mr O'Chee's statement says that in the middle of 1998 he received an invitation to lunch with a senior News Ltd executive and a lobbyist.

The invitation was conveyed to Mr O'Chee by then Nationals state president David Russell, QC. Both men agreed it would not be proper to meet during the state election campaign then in progress, but agreed to a lunch afterwards. Shortly after the election of June 13, Mr O'Chee and Mr Russell arrived at the lunch at one of Brisbane's most exclusive restaurants, Pier 9. As it happened, Rupert Murdoch's son, Lachlan, and the then editor of The Courier-Mail, Chris Mitchell, were having lunch at another table at the same restaurant. When The Age contacted Lachlan Murdoch yesterday, he said through a spokesman that he could not recall the lunch. Mr Mitchell, who now edits The Australian, said he recalled a lunch with Mr Murdoch during which they encountered Mr O'Chee, but he could not recall the presence of the News Ltd executive. Both the News Ltd executive and the lobbyist declined to comment. Mr Russell has also provided a statement that confirms the meeting and those present. While The Age has not seen this statement, it is understood that Mr Russell does not recall any improper offers being made.

During the meeting, Mr O'Chee said, the News Ltd executive argued the digital conversion legislation needed to be defeated because it would bankrupt regional free broadcasters who could not afford to convert to digital. ''I felt that these arguments were made up because News Corporation had no financial interest in non-pay television broadcasting,'' Mr O'Chee's statement states. ''[I] believed that News Corporation's real interest was the effect the digital conversion legislation would cause to its Foxtel business venture, because it would reduce the amount of people who would want to subscribe for these services.'' The News Ltd executive then allegedly said that while it would be controversial for Mr O'Chee to cross the floor, ''we will take care of you''. If Mr O'Chee were criticised over his decision, News Corporation would use its Australian newspapers to look after him, including running his press releases and opinion pieces, he was allegedly told.

''[He] also told me we would have a 'special relationship', where I would have editorial support from News Corporation's newspapers, not only with respect to the digital conversion legislation, but for 'any other issues' too,'' Mr O'Chee said. ''I believed that [he] was clearly implying that News Corporation would run news stories or editorial content concerning any issue I wanted if I was to cross the floor and oppose the digital conversion legislation.'' It was at this point, according to the statement, that Mr Murdoch and Mr Mitchell rose from their table and came over. The statement says Mr Murdoch was surprised to see the News Ltd executive and said, ''I didn't know you were having lunch here today.'' The executive then allegedly told Mr Murdoch: ''This is Bill O'Chee; he's going to help us with digital TV.'' Mr Murdoch and Mr Mitchell had then left, and the lunch broke up shortly after, with Mr O'Chee promising to consider the News Ltd executive's arguments.

A week later he called the executive and told him he would not be crossing the floor. Loading ''After this conversation, it became almost impossible for me to get anything published in the Queensland newspapers which News Corporation controlled, even though I had been able to do so before the lunch meeting.'' Mr O'Chee lost his Senate position in the federal election three months after the meeting.