The Culture Secretary Jeremy Hunt has come under renewed pressure after the press standards inquiry heard how he showed support for Rupert Murdoch's take over of BSkyB just weeks before he was given responsibility for it.
A memo warned that News Corp's James Murdoch was furious about Business Secretary Vince Cable's handling of the matter. It was dated November 19 2010 and expressed concerns that referring the bid to Ofcom could leave the Government "on the wrong side of media policy".
But Downing Street tried to play down its significance, It said Mr Hunt had already made supportive comments about the bid in press interviews earlier that year.
Labour says it shows that David Cameron knew only too well that the Culture Secretary was actively supporting the bid.
The disclosure of the memo came as Mr Hunt's former special adviser, Adam Smith, gave evidence to the Leveson inquiry.
Mr Smith, who quit last month after admitting his contacts with News Corp lobbyist Fred Michel had got too close, insisted he had not been given any specific instructions by Mr Hunt or civil servants on his role in the decision on BSkyB.