George Osborne 'regrets' recommending Andy Coulson

Chancellor George Osborne has today expressed his "regret" for recommending that David Cameron should hire Andy Coulson as his director of communications.

Osborne was asked at a news conference whether it was his idea to endorse former News of the World editor Coulson, who was arrested this month as part of the investigation into phone hacking.

According to the Evening Standard, the chancellor told reporters: "Of course, knowing what we know now, we regret the decision and I suspect that Andy Coulson would not have taken the job. We did not have 20-20 hindsight when we made that decision."

Osborne, along with other government ministers including culture secretary Jeremy Hunt, faces further potential embarrassment tomorrow when a list of meetings will be disclosed detailing the scale of their contact with Rupert Murdoch's News Corporation and other media firms since the coalition came to power last year.

Sources in the Treasury have denied that former News International chief executive Rebekah Brooks and James Murdoch attended Osborne's 40th birthday party last month.

However, it has been confirmed that the chancellor had dinner with Rupert Murdoch in New York last December, only two weeks before Ofcom was due to report back on News Corporation's takeover of Sky.

Over the weekend, it was reported that Murdoch's News International waged a bullying campaign against senior Liberal Democrats in an attempt to secure approval for the Sky takeover.

News Corp ultimately decided to withdraw its £8bn bid to acquire the 61% of Sky that is does not already own following pressure from MPs after the phone hacking scandal.

Deputy prime minister Nick Clegg has called on Ofcom to "very seriously" scrutinise whether News Corp is "fit and proper" to remain a major shareholder in Sky.

Business secretary Vince Cable has also warned that that no other media figure should be allowed to wield the same influence in the UK as Rupert Murdoch has previously done.