Leading article: A question of competence

David Cameron is entering a dangerous phase of his premiership, as the Leveson inquiry starts to hear from witnesses close to him. This week, Andy Coulson, the Prime Minister's former head of communications, and Rebekah Brooks, another former Murdoch executive, will appear.

The Prime Minister had hoped that, having cut Mr Coulson loose in January 2011, the awkward questions about his closeness to the commercial interests of a foreign media magnate would recede. These were becoming more pointed, because the Government had to decide whether to allow Rupert Murdoch's News Corporation to take full control of BSkyB. Jeremy Hunt, the Culture Secretary, ruled that the takeover could go ahead, although he required Sky News to be spun off.

Then the story broke that Milly Dowler's mobile phone had been hacked by News of the World journalists, and two things happened. A wounded Mr Murdoch abandoned his bid for BSkyB; and Mr Cameron's links with Mr Murdoch were subjected to renewed scrutiny.

Ed Miliband and, crucially, Nick Clegg forced him to appoint Lord Justice Leveson to inquire into the relationships between journalists, police and politicians. At first, the inquiry made life uncomfortable for police officers and Murdoch employees, including Rupert's son James. Now, however, things are getting difficult for Mr Cameron.

There are questions of propriety here, of course. But what is perhaps most striking is the question of competence. Cynically speaking, it is extraordinary that Mr Cameron did not appreciate the threat to him and his reputation. The Government's failure to prepare its defence to foreseeable allegations was exposed last week when its counsel, James Eadie, applied, long after the deadline, as Lord Justice Leveson drily noted, for "core participant" status. It looked as if Downing Street, surprised by the publication of damning emails suggesting bias in the handling of the BSkyB bid, had panicked.

Reasons for rising prime ministerial panic include the possibility that Ms Brooks's phone texts might be published. If it is true that Mr Cameron sometimes texted her 12 times a day, the probability that he said something at least embarrassing is high. The Independent on Sunday reveals today that Mr Coulson held shares in News Corp while he worked at No 10. We also report that Fred Michel, the supposedly "Walter Mitty" PR man for News Corp, arranged a meeting between Mr Cameron and a Spanish former prime minister who just happened to be on the Murdoch board.

Leveson now needs to find out how Mr Coulson was hired and retained. The suspicion lingers that Mr Cameron did not try hard enough to find out what Mr Coulson knew of illegal phone hacking or about his continuing financial relationship with his former employer.

Of course, Mr Cameron's opportunism in appeasing News Corp was not the most important subject in the minds of the voters as they went to the polls last week. But it provides an insight into the Prime Minister's character. He seems to take too much on trust, and he fails to think things through. Thus the consequences of the Budget, which matter more immediately to the electorate, continue to unravel and the coalition parties were punished for them on Thursday.

It is a measure of disarray at the centre that Tory MPs are agitating for George Osborne to be replaced as Mr Cameron's strategist by Boris Johnson's adviser, the Australian pollster Lynton Crosby.

As events turn against him, Mr Cameron should be alarmed that it is his own judgement that seems to have been found wanting.