* News Corp boss grilled by media ethics panel
* Says was "mobbed" by reporters over hacking scandal
* His UK papers at heart of storm over journalism
By Estelle Shirbon
LONDON, April 26 (Reuters) - Rupert Murdoch described on Thursday being "mobbed" and "harassed" by journalists and paparazzi, in an exchange rich with irony during his testimony at a judicial inquiry on press ethics prompted by criminal behaviour at one of his papers.
The 81-year-old media mogul was facing a second day of grilling at the Leveson Inquiry, which has heard dozens of witnesses give detailed accounts of being harassed by reporters from Murdoch's own newspapers.
The inquiry was ordered by British Prime Minister David Cameron last year after revelations of widespread phone-hacking at Murdoch's News of the World tabloid. The scandal scuppered Murdoch's bid for full control of satellite TV business BSkyB and embarrassed Cameron by exposing his close ties to Murdoch's inner circle.
Murdoch was hauled over the coals by the inquiry's lead counsel, Robert Jay, over a bizarre moment on July 10 last year, just after he had abruptly shut down the News of the World and put 200 people out of work.
The phone-hacking scandal was a top world news story at the time, and when Murdoch emerged from his London home with his protegee Rebekah Brooks, then CEO of his British newspaper business, they were surrounded by reporters and photographers.
Asked by a Reuters reporter what his priority was at that time, Murdoch pointed at Brooks and said "this one".
His answer raised doubts about the tycoon's handling of a major crisis that posed a threat to his business interests not only in Britain but across the world.
Quizzed by Jay on what he had meant, Murdoch revisited the episode.
"I'm walking across the street from my apartment to a hotel. We were mobbed by journalists and paparazzi. I had a microphone stuck on my mouth and they said 'what's your main consideration?' and I said 'her, here'," he said.
"PART OF THE GAME"
Later on in the exchange, Jay asked whether Murdoch felt that the reporters had behaved inappropriately. Here is what was said next.
Murdoch: I think it's part of the game.
Jay: And what's the game?
Murdoch: Harass people. You know, I was being harassed. I was trying to walk all of 10 yards across the street. I had another 20 or so outside my apartment this morning.
Jay: But part of the game of harassment, intrusion, these are recurrent themes in the behaviour of the press for decades, would you not accept that?
Murdoch: Yes, it can take many forms, but yes.
This dialogue will have raised eyebrows among the many people, celebrities as well as ordinary members of the public, who have complained bitterly of their treatment at the hands of the press, particularly people working for the Murdoch papers.
Murdoch's critics allege that his aggressive management style bred an ultra-competitive culture at his papers that put pressure on reporters to get stories whatever the means.
Actors Hugh Grant and Sienna Miller are among the many witnesses who have appeared at Leveson to describe being chased down the streets or besieged in their homes by photographers or reporters seeking salacious scoops.
The exchange between Murdoch and Jay was also revealing of the enduring strength of the bond between the media mogul and Brooks, who enjoyed a meteoric rise from secretary at the News of the World to editor of that paper, then of its sister paper the Sun, then to CEO of News International.
Brooks resigned last summer over the phone-hacking scandal and has since been arrested twice as part of police inquiries into allegations of wrongdoing at News International. None of those arrested in connection with the affair has yet been charged.
In his testimony at Leveson, Murdoch was at pains to protect Brooks. He said News of the World reporters had hidden their illegal activities from her.
Concluding his questioning on the July 10 episode, Jay asked Murdoch why his instinctive response when a microphone was thrust under his nose was to prioritise Brooks rather than saying "we need to clean up my company".
"Because I was concerned for Rebekah Brooks, who was seeking to resign, and under great pressure, and I was seeking to keep her confidence. I mean, her self-confidence," Murdoch said.