'I warned Cameron over the hiring of Andy Coulson', says Clegg as he distances Lib Dems from hacking scandal

• Coalition facing deeper splits as Clegg distances himself from Cameron
• Lib Dem leader raised serious concerns over phone hacking suspect when Coalition was formed
• Pressure on Cameron grows as aides admit he did discuss BSkyB bid with Murdochs

Deputy Prime Minister Nick Clegg warned David Cameron about having shamed phone hacking suspect Andy Coulson at the heart of government, it emerged today.

The Liberal Democrat leader took Cameron to one side when the Coalition was formed in 2010 and questioned why the former News of the World editor was a Downing Street communications director.

As pressure on the Prime Minister grew, Mr Clegg added to deepening divisions in government as he attempted to distance himself and his party from the 'murky practices' that have 'rocked' the establishment to its core.

Mr Clegg insisted that the decision to appoint Coulson - who has since been arrested - rested solely with Mr Cameron, signalling that the Prime Minister should take responsibility for the furore.

'I asked questions about some of the decisions about who was being brought into government, who had been active in opposition,' Mr Clegg said in a conference at Admiralty House today.

Asked whether he had challenged Mr Coulson's appointment, Mr Clegg said: 'Of course there were constant conversations - particularly in the early stages of the Government - about how the Government was going to be formed, who was going to be appointed, who was going to be employed and so on.

He added: 'It was (Mr Cameron's) decision and he has been very frank and candid about the fact that he takes responsibility for it. In the same way that I take responsibility for appointments in my team, he takes responsibility for appointments to his team.'

The comments came as Prime Minister David Cameron was under renewed pressure today over his contacts with senior executives at News Corporation.

Aides have now confirmed that Mr Cameron had discussed the company's bid to take over BSkyB with the media players.

The attack from his coalition partner will add to the pressure on Cameron and deepen the cracks in government

Mr Clegg said that there were 'murky practices and dodgy relationships' at the heart of Britain's establishment.

He said the hacking scandal, and allegations that police officers were paid by the press for information, had 'shaken' faith in the police and brought public opinion of politicians to an even lower level

The Lib Dem leader sought to establish a distinctive position for his party, saying: 'I don't think anyone should be surprised that the Liberal Democrats and Conservatives come at this issue from completely different directions.

'We were the only party in opposition to call for an inquiry into the phone-hacking allegations, even before the election.

Mr Clegg said that the judge-led inquiry into the hacking allegations provided a once-in-a-generation opportunity to clean up the media, politics and the police, by legislation if necessary. Politicians must be ready to accept Lord Justice Leveson's recommendations and act on them, he said.

Liberal Democrats have not been implicated in the recent furore over politicians' relations with the press, but Mr Clegg has struggled to capitalise on this in the polls.

Mr Clegg added: 'Going back further than that, we were the only party to campaign for new pluralism rules in the media. The Liberal Democrats have had a particularly unique role in raising issues which were ignored by the other parties for years and years, most notably by the last Labour government.

'I was the first person in Government to say it had to be a judge-led inquiry. I was the first person in Government to say that Rupert Murdoch needed to reconsider his bid.

'I was the first person in Government to say we needed to cover not just the police and press but politicians as well.

'On each and every one of these counts, I pushed that case and thankfully we have now got the right kind of inquiry, which I think will go a long, long way to cleaning up what was a very, very unhealthy state of affairs.

'I passionately believe in open, transparent balanced government where people are not in each other's pockets, and that is what I think we now have an opportunity to achieve over the next few months and years, and that is an opportunity I hope we will seize.'

Mr Clegg added: 'I think that we now have a once-in-a-generation opportunity to really clean up the murky practices and dodgy relationships which have taken root at the very heart of the British establishment between the press, politicians and the police.

'That is what we now need to get on and do. That's what the independent judge-led inquiry will allow us to do. We must act on any recommendations from that inquiry quickly, if necessary through legislation as well.'

Pressure on the Prime Minister has escalated as Downing Street said that Mr Cameron could not rule out that BSkyB was mentioned during his meetings with senior News Corp figures

These included chairman Rupert Murdoch and his close friends, the former News International chief executive Rebekah Brooks.

But Downing Street insisted that none of his conversations were 'inappropriate'.

Culture Secretary Jeremy Hunt - who had responsibility for making the final decision on the bid, which has now been dropped - told MPs last night: 'The discussions the Prime Minister had on the BSkyB deal were irrelevant.

'They were irrelevant because the person who had the responsibility... the person who was making this decision was myself.'

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