When former Herald Sun editor-in-chief Peter Blunden celebrated 10 years in the hot seat in April 2006, so many Melbourne power players paid homage that an ill-timed terrorist attack would have ground the city to a halt.

Peter Costello, Steve Bracks, Robert Doyle, John So, Christine Nixon, Dame Elisabeth Murdoch, Lachlan Murdoch, Janet and John Calvert-Jones, Jeff and Felicity Kennett and Eddie and Carla McGuire and then-prime minister John Howard were all present at the RACV Club in Collins Street, with the event written up a few days later under the headline “Salute to the Chief”.

But while the guest list was widely reported, another curious aspect — a lavish video tribute produced by News Limited’s production arm — left many onlookers wondering whether the adulation had gone too far.

In the video, Nixon — who at that stage was yet to fall out of favour with the paper — sat at her desk, in full regalia. Staring down the barrel in mock Crime Stoppers mode she said this: “We’ve found him, we have found the Mr Big of Melbourne.”

That nervous tittering that ensued was surely the high water mark in Blunden’s claim to the city. For the previous decade Blunden, a News lifer since his days as a cadet in mid-1970s, demanded loyalty from friends and making life uncomfortable for his enemies. Each morning 1 million sets of eyeballs admired his handiwork. His stories were then followed up on morning radio, and often, as the lead story on the 6pm news.

But nine months later he was out on a limb, “promoted” to deputy managing director at HWT to make way for his nemesis Bruce Guthrie, plucked from The Weekend Australian Magazine in Sydney as his replacement as the new editor-in-chief.

Blunden, who ironically recommended Guthrie’s appointment, was left counting beans while his paper forged a new path. The eventual outcome, Guthrie’s unfair dismissal, was entirely predictable. As Guthrie explained coyly in court: “I was worried that he was struggling to accept the editorial-commercial divide.”

Now, nearly five years later, with Guthrie gone and three loyalists in Phil Gardner, Simon Pristel and Damon Johnston back under his wing, has Mr Big once again jammed his flag into the city’s summit?

Legendary former Herald Sun business, Sunday Age, and Australian editor Malcolm Schmidtke, who until 18 months ago worked under Blunden, doesn’t necessarily think so.

“He was the Herald Sun when he was the editor-in-chief, but he isn’t the editor-in-chief now,” he says. “He’s still powerful, he’s the managing director of Melbourne’s biggest media organisation. But he doesn’t have that naked power he once had … Pristel especially is pretty much his own guy.”

Still, Schmidtke agrees that his influence “was more direct after Guthrie left, for sure”.

For someone so apparently fearsome, Blunden turns out to be a thoroughly genial interview subject. He alludes to the frustration when Guthrie took over, when he was effectively banned from the news desk.

“There was a time when there was some expectation that somehow I would sit in a corner and not be seen or heard from again and I’m afraid that’s not my style and not the way I work,” he tells The Power Index. “I’d like to think that I could actually offer something to editors and assist them on the way and support them rather than just hide in the corner and watch it all happen.”

Guthrie, he says, is “ancient history”.

The Hun, which last year celebrated its 21st birthday, remains influential, especially through its related website. Its market penetration is world beating. But rather than acting as the unaccountable and intimidatory overlord bemoaned by critics, Blunden says its power is drawn from its deep resonance with readers.

“I think it has a lot of influence. The Herald Sun’s role is to act as an advocate, it can get up people’s noses by doing that and that’s part of the role,” he says. But it has to represent its readers in the best way it can. It identifies issues that are relevant, interesting and important to its readership and brings that to the wider community.”

But isn’t the paper itself a player, helping to define what passes for the public interest? “I don’t think you’re ever too much of a player when there’s an important issue.”

It’s a theme taken up by storied newspaperman-turned-author Les Carlyon and media buyer Harold Mitchell, who both say Blunden, like 3AW host Neil Mitchell, has a unique knack for taking Melbourne’s temperature.

Still, for those on the receiving end of its wrath — a lenient judge, an ailing police chief, a Greens politician — the damage can be permanent.

“Peter still punishes people,” says another former News editor. “You know that if you don’t play ball with Blunden you’re going to pay the price. In his world you’re either a mate or a c-nt. And you can go from one to another pretty quickly and you can’t go back the other way.

“News Limited is a company of half-back flankers, these little nuggety blokes with Hartigan as the old coach saying ‘go and take him out’, ‘go and knock his head off’, ‘this bloke can’t last past the first quarter’ … they’re a strange company of bash artists”.

When asked if there’s anyone in Melbourne who won’t return his calls, Blunden laughs and replies: “I guess not … but I think it works both ways, I don’t think I’ve ever been a person who’s not returned a call. People take my calls just as much as I take theirs.”

*Read the full profile at The Power Index