Keating denies deal with press magnate: Australian PM refuses to co-operate with Senate over Conrad Black empire

A POLITICAL storm erupted in Australia yesterday over allegations that Paul Keating, the Labor Prime Minister, laid down conditions under which Conrad Black, the Canadian press magnate, could extend his ownership of Australian newspapers.

Mr Keating told parliament in Canberra yesterday that he would not appear before an inquiry into the affair that the opposition con servative coalition and the Democrats, a minor party, have instigated in the Senate, the upper house, where the government does not have a majority.

Mr Black, ministers and newspaper editors are expected to be questioned, but Mr Keating dismissed it as 'yet another of the Senate's costly political fishing expeditions'.

The row stems from the publication in Australia last week of Mr Black's autobiography, A Life in Progress, in which he describes his successful battle two years ago to control John Fairfax Holdings, Australia's most influential newspaper group, whose titles include the Sydney Morning Herald and The Age of Melbourne.

Mr Black wrote how he visited Mr Keating a year ago, when a general election was pending, and discussed his wish to increase from 14.9 per cent to 25 per cent the stake in Fairfax of his British company, The Telegraph PLC. He wrote of Mr Keating's reaction: 'If he was re- elected and Fairfax political coverage was 'balanced' he would entertain an application to go higher.' Mr Keating, he wrote, 'impresses me as a more capable leader than any other current English-speaking government head, as well as a delightful companion.'

Mr Keating was re-elected in April, and his cabinet approved Mr Black's application. Last weekend, at the summit meeting of leaders from the Asia Pacific Economic Co- operation group in Seattle, Mr Keating confirmed the conversation. He said he had told Mr Black: 'We'll think about it, but we want a commitment from you that the paper will be balanced. And if there is any notion that, you know, of bias, that is that he barrack for the coalition on the basis of conservative proclivities in other places, then there's no way you would qualify as a kind of owner we would like.' Asked in Seattle if it was appropriate for him to make such judgements over journalistic standards, Mr Keating replied: 'Well, I'm the Prime Minister. That's how I become the judge.'

Mr Keating's remarks sparked a furore among opposition parties who accused him of linking newspaper ownership with the political performance of the newspapers. Mr Black, in Australia promoting his book and to attend the Fairfax annual meeting, denied he and Mr Keating had concluded any deal to enable him to raise his holding.

Mr Black alarmed Labor MPs when he said that he wanted to increase his Fairfax stake to 50 per cent and that he had met Mr Keating last week to discuss it. John Dawkins, the Treasurer (finance minister), said on Tuesday that the government would not change its 25 per cent limit on foreign ownership of Australian newspapers.

Opposition MPs yesterday pressed Mr Keating on the matter, but he countered by accusing John Hewson, the opposition leader, of indicating to Mr Black that the opposition would place no limits on his control of Fairfax.