The Financial Services Authority (FSA) may look into whether or not emails between News Corporation and the government broke insider trading rules, it is understood.

During the Leveson inquiry into press standards on Tuesday, emails between Culture Secretary Jeremy Hunt’s office and a senior News Corp executive about the company’s bid to takeover BSkyB were revealed. They appeared to show Hunt’s support for News Corp’s bid, and that his special advisor Adam Smith was passing information about Hunt’s decisions around the bid to News Corp’s senior VP of government affairs and public policy, Frederic Michel.

Michel then communicated information to his boss, James Murdoch.

Smith has resigned following the revelations, saying that his contact with Michel was not authorised by Hunt.

While the FSA could “neither confirm nor deny” that it would carry out an investigation, it said the case “could come under market abuse rules.”

Market abuse regulations cover all individuals, not just licensed financial traders.

According to the Financial Services and Markets Act 2000, market abuse can occur when an insider deals, or attempts to deal, in an investment on the basis of inside information. Or, it can refer to investment behaviour that is based on information not generally available to the market.