Senior staff at the Daily Mirror including former editor Piers Morgan 'must have known' about widespread phone hacking committed by its staff, former reporter James Hipwell has told the Leveson inquiry.

Hipwell told the inquiry into press standards that Morgan knew where each of his stories came from, and as a result "must have known" about exclusives gained through phone hacking.

"[There was a] 'cult of Piers', he was the newspaper, he was extremely hands on, nothing happened at the newspaper without him knowing," Hipwell said.

"He wanted to know where [the stories] came from, who do we know, what's the evidence, that was his job and he did it very well."

He added that phone hacking "seemed to be a perfectly acceptable way to get stories".

Hipwell said "As I think he said in his testimony, he took a very keen interest in the work of his journalists. Showbusiness is very close to his heart."

Publisher Trinity Mirror insists that its journalists work within the criminal law and the Press Complaints Commission code of conduct.

Morgan, in his evidence to the inquiry yesterday, also said that the PCC code was enforced at the Mirror.

However Hipwell told the inquiry he had not been given a copy of the code and had heard nobody mention it during his time there.

In his statement he said: "The openness and frequency of their hacking activities gave me the impression that hacking was considered a bog-standard journalistic tool for gathering information."

Mr Hipwell told the inquiry the reporters believed hacking was acceptable as celebrities were "fair game".

"I think it was seen as a slightly underhand thing to do but not illegal," he said. "I don't think the illegality of it was ever even considered. ... It just seemed to be fair game, fair play, any means to get a story."

He added: "It became a daily part of their news-gathering operation."

Hipwell received a six-month prison sentence in February 2006 for purchasing low priced stocks and then recommending them to readers. He claimed in July that journalists at the Daily Mirror and other newspapers hacked phones.

The inquiry into press standards, which after today will break until January 9, will also take evidence from three journalists who wrote about the disappearance of Madeleine McCann from Portugal in 2007 for the Daily Express, Nick Fagge, Padraic Flanagan and David Pilditch.