The mother of Sarah Payne, the eight year old who was abducted and murdered in July 2000, has been told by police investigating phone hacking at the News of the World that there is evidence to suggest that she was targeted by private investigator Glenn Mulcaire. Her name had been found among Mulcaire's notes by officers from Operation Weeting, Scotland Yard's investigation into phone hacking allegations. Police had initially told Payne that her name was not in Mulcaire's notes.

Labour MP Tom Watson said: "This is a new low. The last edition of the News of the World made great play of the paper's relationship with the Payne family. Brooks talked about it at the committee inquiry. Now this. I have nothing but contempt for the people that did this." Watson has declared an interest in recalling News International Chairman James Murdoch, former News of the World editor Colin Myler, and News of the World legal manager Tom Crone back in front of a parliamentary committee.

John Whittingdale, chairman of the Culture, Media and Sport Select Committee, called these latest revelations "horrifying but perhaps unsurprising given who else appears to have been targeted."

Online magazine Popbitch suggested as far back as July 8th that Sara Payne may have been targeted by Glenn Mulcaire, and that rumours around News International implied that then-editor Rebekah Brooks herself may have personally handed over the phone.

Brooks confirmed in a statement that Sara Payne was given a phone by the News of the World, saying that "For the benefit of the campaign for Sarah’s law the News of the World have provided Sara with a mobile phone for the last 11 years. It was not a personal gift."

The former News International CEO said that "these allegations are abhorrent and particularly upsetting as Sara Payne is a good friend." Brooks declared it "unthinkable" anybody on the newspaper knew that Sara was targeted by Mr Mulcaire.

Sara Payne has said that she is "absolutely devastated" by the news. She had felt that she was a friend of the News of the World, and had told the Sun earlier this month that "The NOTW team supported me through some of the darkest, most difficult times of my life and became my trusted friends."

The News of the World was one of the papers which pushed the campaign for Sarah's Law, which allows parents with young children to see if a convicted child sex-offender was living nearby, and claimed in its final issue that this proved that the paper had acted as a "force for good" during its 168 year long run.

Sara Payne wrote a column for the final issue of the paper in which she praised the paper for its support for "Sarah's Law". She also said that "there were rumours-which turned out to be untrue-that I and my fellow Pheonix charity chiefs had our phones hacked". Friends of Sara Payne told the Guardian today that she had not yet decided whether or not to sue the News International paper and that she wanted the police to be able to conclude their investigation before making a decision.

After it was revealed that the voicemail messages of the murdered schoolgirl Milly Dowler were hacked into, Police officers working for Operation Weeting have said that they are to examine every high-profile case involving the murder, abduction, or attack on any child since 2001.

Martin Moore, Director of the Media Standards Trust and founder of the Hacked Off campaign, said: "This new revelation, which indicates breathtaking hypocrisy and a complete lack of moral sense, underlines the importance of full exposure of what was happening at the News of the World and a need for the judicial inquiry to start work on this aspect of their investigation as soon as possible."

These latest allegations could have further repercussions for those higher up News International. Co-Chair of the Liberal Democrat Culture, Media and Sport Parliamentary Party Committee, Don Foster said: “BSkyB’s board must now reconsider their unanimous support for James Murdoch, and those complicit in these terrible actions must be brought to justice.”

It could also prove damaging to the Government, especially David Cameron. Ivan Lewis MP, Labour's Shadow Culture, Media and Sport Secretary, said that this story "casts a further shadow over David Cameron's judgment in employing Andy Coulson. He and George Osborne have failed to provide full and frank answers."