Australia PM denies wrongdoing over '95 union fund

Australia's leader denied she personally benefited from helping a boyfriend set up a union fund 17 years ago, comprehensively addressing the scandal Thursday for the first time in a likely acknowledgement that silence could harm her party's election chances next year.

The accusations have dogged Prime Minister Julia Gillard for years but her news conference came after The Australian newspaper, owned by Rupert Murdoch's News Ltd., apologized on its website for reporting in Thursday's print edition that Gillard had set up the trust fund in 1995 for Bruce Wilson, a top official with the Australian Workers Union.

Gillard was a lawyer at the time and had in fact only given legal advice to Wilson, then her live-in romantic partner.

News Ltd., which owns 70 percent of Australian newspapers, has apologized and retracted three reports in five years relating to the union fund. Gillard ended her relationship with Wilson after he was accused of corruption regarding the fund; police investigated him but he was never charged.

"I had no involvement in the working of the association," Gillard said. "I provided advice in relation to its establishment and that was it."

"In these circumstances where I am seeing recycled again false and defamatory material attacking my character, I have determined that I will deal with these issues," she told reporters, adding that she will not sue New Ltd. For defamation.

"It's very, very hard ... to explain why three times these defamatory allegations would come around when on every occasion News Ltd. has ended up apologizing for them and retracting them," she said.

Gillard said she believed at the time the trust fund was solely meant to support electioneering and fundraising by union officials.

News Ltd. newspapers, led by The Australian, have been publishing previously unseen internal law firm documents this past week that suggest she resigned from her partnership at the law firm over the union fund scandal.

The renewed accusations come as Gillard's center-left Labor Party government plans to announce new media controls before the end of the year. The government opened an inquiry into possibly increasing newspaper regulation in Australia after News Corp. closed its top-selling British tabloid News of the World last year over illegal phone hacking allegations.

Gillard gave the assurance that the regulations would not reflect her recent personal differences with News Ltd.

"My thinking about media regulation will not be defined by these events. I've well and truly got my eyes on the public policy questions and the future," she said.

Australian general elections are due in 2013, and current polls suggest Gillard and her Labor Party government would fall to the opposition.