Rupert Murdoch was "extremely impressed" by David Cameron the first time he met him, he has said, especially the way he treated his children.
But the media mogul risked criticism by referring to the Prime Minister's late son Ivan, who suffered from severe epilepsy and cerebral palsy and died in 2009, as "retarded". Mr Murdoch, 81, said he first met then-opposition leader Mr Cameron at a family picnic at his daughter's country home.
"I first met him once or even twice at family picnics, at weekends at my daughter's house in the grounds of Blenheim Castle, where he came with my family. We were over-run by children, there were no politics, but I was extremely impressed at the kindness and feeling he showed to his children and particularly to his retarded son."
Mark Gale, campaigns and policy officer for learning disability charity Mencap, said: "From Mencap's point of view, the use of the word is completely outdated and it is quite shocking that someone of Rupert Murdoch's standing, who is supposed to be close to public views and the public opinion, would be so careless in his choice of language.
Some time after the picnic, Mr Cameron visited Mr Murdoch at his offices in Wapping, east London, at the Tory leader's request. But the tycoon denied any involvement in the appointment of former News of the World editor Andy Coulson as Mr Cameron's communications chief in May 2007. He told the hearing: "I was just as surprised as anyone else."
He said he had never discussed BBC licence fees with Mr Cameron, adding: "I had been through that with previous prime ministers and it didn't matter what they said, they all hated the BBC and they gave it whatever they wanted."
He also said he never spoke to Mr Cameron about Ofcom. He told counsel for the inquiry Robert Jay QC: "You keep inferring that endorsements were motivated by business matters and if that had been the case, we would have endorsed the Tory party in every election. It was always more pro-business."
He told the inquiry he could not really remember meeting Mr Cameron on a yacht near the Greek island of Santorini in August 2008.
"Politicians go out of their way to impress people in the press and I don't remember discussing any heavy political things with him at all," he said.
"I think that's part of the democratic process. All politicians ... like to have their views known by the editors of newspapers or publishers, hoping that they will be put across, hoping that they will succeed in impressing people. That's the game. Mr Cameron might of course think stopping in Santorini would impress me. I don't know."