An official at Number 10 advised the Metropolitan Police against informing the prime minister that the former deputy editor of the News of the World, Neil Wallis, had been connected with allegations over phone hacking, it has emerged.
Wallis formerly worked under Andy Coulson at the News of the World, while Coulson was the paper's editor. Wallis later became a part-time PR consultant with the Metropolitan police, earning £1,000 a day, two days a month.
The outgoing Metropolitan Police Commissioner, Sir Paul Stephenson, made the revelation during his appearance before the Home Affairs Select Committee this lunchtime.
However Sir Paul insisted that here was no conflict of interest in his decision not to inform the prime minister. He told MPs, "You might not like the answer, but it's in line with advice from a senior official, I just would not want to open up the prime minister ... to any allegations ... that they might be compromised. The reason why I wouldn't tell the mayor is exactly the same reason."
""Why did I not tell the prime minister before Wallis' name was connected with phone hacking? I would have no reason to," Sir Paul said. I had no reason to. I had no knowledge of the previous inquiry, and had been given assurances by a Chief Constable that there was nothing new."
Sir Paul also said, "I do not believe that the prime minister would be compromised. All I was trying to do was guide him."
He later clarified his position, saying: "I did not say that a senior official told me, it is my understanding that is consistent with the advice from a senior official."
Sir Paul said he didn't know who the official was, but suggested that Former Assistant Commissioner John Yates might know who that official was.
Sir Paul Stephenson resigned as the head of London's police force on Sunday, because of revelations that he had been given free lodgings at the luxury resort Champney's, while recovering from an illness. Neil Wallis also worked for the resort.
He told MPs that he wasn't aware that Wallis had been connected to the resort, saying it was "damnably unlucky that it seems Wallis was connected with this".
Sir Paul is the first in a series of high-profile witnesses before Commons committees this afternoon, all appearing in connection with alleged phone hacking and police corruption. Former Assistant Commissioner John Yates - who resigned yesterday - will appear shortly.
During Tuesday's lunchtime evidence Sir Paul was asked why he did not question the decision by the Met to hire Wallis, given his connections to News International. He was reminded by a report by the Information Commissioner's Office, which suggested that the News of the World had been involved in more than 200 cases of phone hacking.
He said: "That report mentioned News of the World and other newspapers. When I became Commissioner I looked at the risks ... and I have to say, and of course it's regrettable with hindsight... there was no reason for that to be on my desk, even with that report."
At the start of the hearing, committee chairman Keith Vaz, highlighted Sir Paul's resignation statement, in which he said:
Unlike Mr Coulson, Mr Wallis had not resigned from News of the World or, to the best of my knowledge been in any way associated with the original phone hacking investigation.
Vaz suggested that this constituted as swipe at the prime minister. Sir Paul replied: "I was taking no such swipe at the prime minister. I do agree with the PM when he says this is entirely different."
When asked to clarify this, Sir Paul said: "When Mr Coulson resigned ... by definition he associated his name with hacking. That is simply and blindingly obvious. I had no reason to doubt Mr Wallis' integrity. That is the difference. I was just trying to give an example that Mr Wallis' name never came into hacking."
Sir Paul insisted at the time he took up the post of Commissioner that he saw no reason to doubt the original police investigation into phone hacking, a probe now known to have been deeply flawed. Sir Paul said it was "very regrettable" that the information now known about phone hacking wasn't discovered in the original investigation.
He signed off saying: "I sincerely regret that Mr. Yates has gone. I think the work he has done, particularly in counter-terrorism in this country, has been splendid, and I think we're the poorer for his passing."