By Kate Holton and Estelle Shirbon
LONDON, May 11 (Reuters) - David Cameron signed off messages to tabloid editor Rebekah Brooks with an affectionate "LOL", she told an inquiry on Friday, conjuring the embarrassing image of a British prime minister-in-waiting fawning over a Rupert Murdoch protegee.
As editor of Britain's most-read newspapers the News of the World and later the Sun, Brooks had the power to make or break careers and was courted for years by top politicians until she abruptly fell from grace in July 2011.
Appearing at a judicial inquiry into press standards, Brooks was pressed for details of her close friendships with successive British prime ministers, including Labour's Tony Blair and Conservative David Cameron, now in office.
"Occasionally he would sign them off LOL, lots of love," Brooks said in answer to a question on text messages she frequently exchanged with Cameron during the 2010 election campaign, when he was still in opposition.
"Actually, until I told him it meant 'Laugh Out Loud', and then he didn't sign them like that anymore," she added, blushing to the roots of her signature bright red curls.
Murdoch shut down the News of the World last July when it emerged its journalists had hacked into the voicemails of public figures and a murdered schoolgirl. In the wake of the revelations, Brooks resigned as CEO of Murdoch's British newspaper group and is now under police investigation.
Her testimony at the Leveson Inquiry revealed she had met frequently with Cameron, lobbied key offices of government for the approval of a major Murdoch takeover bid and intervened in the long-running row between former Labour Prime Ministers Tony Blair and Gordon Brown.
"We were a newspaper that was looking after the real, serious concerns of our readers," she said, glancing between her race-horse trainer husband Charlie, the judge and the lead lawyer. Brooks, a celebrity in her own right who was previously married to an actor from a popular TV series, was dressed in a demure black dress with white collar and cuffs.
Lawyer Robert Jay cut straight to the chase as Brooks began her day-long testimony, pressing her for names of politicians who had expressed sympathy when she was caught up in the hacking storm in July 2011. At first Brooks sought to evade the question, but eventually said:
"I received some indirect messages from Number 10, Number 11, the Home Office, the Foreign Office." Numbers 10 and 11 Downing Street are the prime minister's and finance minister's offices respectively.
The impression that the prime minister and finance minister George Osborne surrounded themselves with a coterie of privileged individuals for cosy dinners and horse riding in the English countryside has been pounced on by critics.
Cameron also sent a message to Brooks via an intermediary explaining that he could not remain loyal to her publicly because opposition leader Ed Miliband "had him on the run" over his cosy relationship with top people in the Murdoch empire.
Brooks said Blair, with whom Murdoch had a friendly relationship, had also got in touch at that time, but his successor Gordon Brown had not. Brown had once courted Brooks and Murdoch, but had fallen out with them over coverage that he viewed as hostile and intrusive.
"He was probably getting the bunting out," Brooks said with a smile.
The 43-year-old Brooks was for years part of an exclusive circle of friends that included Cameron, Murdoch's daughter Elisabeth and others known as the "Chipping Norton set" for their weekend gatherings in the picturesque Oxfordshire town.
Cameron, who has acknowledged politicians' ties with Murdoch were far too cosy, is grappling with a series of disclosures from the Leveson Inquiry that have shown the close social ties between government and Murdoch's most powerful executives.
Cameron reluctantly ordered the Leveson Inquiry under intense pressure from the public and the opposition Labour Party.
The appearance last month of James Murdoch at the inquiry revealed how a senior ministerial aide had repeatedly and inappropriately sought to help Murdoch's News Corp secure the $12 billion takeover of pay-TV group BSkyB.
The aide immediately quit but the minister Jeremy Hunt is also facing calls to stand down. In a written statement to accompany her appearance, Brooks said she had spoken to Cameron and other government members to express her feelings forcefully in support of the bid.
Dubbed by some the "fifth daughter" of Rupert Murdoch, Brooks edited the News of the World from 2000 to 2003 and went on to become the first female editor of the Sun daily tabloid, Britain's most widely read newspaper, for six years.
She confirmed her position as one of the most important executives in Murdoch's global empire with promotion to run the British newspaper arm, News International, from 2009 to 2011.
John Prescott, deputy Prime Minister under Blair, has told how Brooks played on the rivalry between Blair and Brown, widening a rift at the top of the then-ruling Labour Party which marred much of their time in government.
"It wasn't a playground spat," Brooks told the court, when asked about her relations with the two men when they battled over the leadership of the Labour Party. "They were the prime minister and the chancellor of the exchequer."
Despite a tough demeanour that could intimidate hardened "hacks", Brooks is described by current and former colleagues as a phenomenal networker who could charm and beguile senior politicians and police.
As the phone hacking scandal spiralled out of control last July, Rupert Murdoch flew into London to take charge of the crisis, putting his arm around Brooks in the street outside his house and telling reporters that she was his top priority.
But her fall has been as dramatic as her rise: she has been arrested on suspicion of phone hacking, bribing a public official and conspiracy to pervert the course of justice.