A solicitor from the prestigious law firm which represents the Queen has said he was aware phone hacking at the News of the World may have gone beyond one rogue reporter two years ago.
Julian Pike, a partner in Farrer & Co, who acted as an external council to News Corporation during a case over Football Association boss Gordon Taylor, said he advised the company "there was a powerful case to support a culture of illegal accessing of information in order to get stories."
He told the Commons culture, media and select committee that he had "no obligation" to report the illegal activity to the police.
Pike said that when representatives for the former newspaper gave evidence to parliament in 2009 in which they maintained phone hacking was limited to one rouge reporter, he was aware of journalists alleging the practice was more widespread, but refused to say the committee was misled: "It would be very unfair of me to say anybody deliberately misled you."
And Pike disclosed that James Murdoch had instructed Tom Crone to give Taylor a payout of up to £500,000 - but denied that he had told solicitor Mark Lewis, who represented Taylor, "you are dealing with Murdoch" during negotiations.
He added that he was not aware if James Murdoch had known about the 'For Neville' email that identified that other journalists were involved in phone hacking.
"The briefing notes didn't refer to the fact that this email had been found and he did not identify it in briefing notes."
However, taking his seat before the committee, Lewis insisted that Pike had told him that he had been "dealing with Murdoch".
"It was a memorable statement," said Lewis, though he was unable to provide any documentary evidence.
When asked if he thought the News of the World would still be opened had he not pursued his case on behalf of Gordon Taylor, Lewis said:
"The News of the World stance on all these cases has moved from one rogue reporter... to trying to present this as something about people who have no right to any sympathy - celebrities and sports people."
He added that it was only after the details of the hacking of Milly Dowler’s phone that all the other newspapers broke their code of silence and reported on the victims of crime.
Lewis said that he was offered £250,000 by News International to settle the Gordon Taylor case straight away, however a breach of privacy case has a usual payout of around "£40,000 maximum", particularly for an unpublished story.
"They paid over the odds," he added, saying NI was willing to do so in the hope of ensuring confidentiality. "They didn't want the story to get out."
Lewis added that he believed his own phone had been hacked and, when asked about whether he thought people had lied before the committee, he said:
“James Murdoch likes to give the impression that he’s incompetent rather than dishonest. He has been wildly dishonest.”