He accused journalists of undermining the Government's image and said they "consistently distort what you have got to say".
He said: "The BBC has the greatest responsibility because the BBC is the most powerful broadcasting operation going."
Mr Hill singled out the corporation for criticism in his seminar on spin for peers, MPs, academics and union activists held at the House of Lords. He said the BBC should be "constantly reminded" of its responsibility as a public sector broadcaster which is believed by "60 or 70 per cent of the population".
Mr Hill advised the Prime Minister to bypass British journalists by making statements to the foreign press. "If you can get the right thing said in the press abroad it comes back here. In government we have historically as a party not taken the foreign press as seriously as we should," he said.
"It can be used very effectively to bounce back good messages here which will then be picked up by the press and used in a way they wouldn't be if they had just come from a domestic source."
Mr Hill signalled he would work to counter accusations that Mr Blair had lost touch with the UK electorate after a year of concentrating on foreign issues, including Iraq. He hinted that the Prime Minister should do more direct television interviews, cutting out the traditional news media in favour of chat shows such as Parkinson or Tonight with Trevor McDonald.
"Not just for Tony, and for all politicians, if you are worried about the prism of the media - be it broadcasters or writing journalists [who] consistently distort what you have got to say - then the one way you avoid distortion is by saying it direct," he said.
Direct appearances would help portray cabinet ministers as "ordinary human beings who have seen the same things as you have seen and have the same values".
Mr Hill said Labour could learn from the communications strategy of Lady Thatcher.
"Mrs Thatcher was talking the talk. She was talking to the press and she was talking to the public. You actually have to talk to the electorate."
That there would be an end to the "bizarre" lobby system of political journalists being briefed anonymously by Downing Street was inevitable.
"This constantly is used as a mechanism as much by the BBC as anyone else for creating a sense of strife and conflict which might not otherwise be there," he said.
Mr Hill's comments were made on 14 May at a time when No 10 was expressing disquiet about BBC reporting of the war on Iraq. By then he was seen in Downing Street as the successor to Mr Campbell, who had told Mr Blair in April that he wanted to leave.
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INDEPENDENT
Hutton inquiry website
British Parliament Foreign Affairs Committee transcript:
Evidence of Dr David Kelly
Key players in the 'sexed-up dossier' affair
Herald Feature: Iraq
Iraq links and resources