Rebekah Brooks's phone was hacked twice a week by colleagues at the News of the World while she was editing The Sun, the Leveson Inquiry heard today.
Scotland Yard invited her to join their 2006 prosecution of a journalist and private detective working for the Sunday tabloid as a potential victim of illegal interception of voicemails.
Ms Brooks - who was herself a former editor of the News of the World, The Sun's sister paper, and became chief executive of parent company News International in 2009 - did not take up the offer.
She in fact passed on information about the hacking investigation she gleaned from the police to the News of the World's lawyers.
Robert Jay QC, counsel to the press standards inquiry, said today: "Rebekah Wade, as she then was, was one of the most accessed since 2005, twice a week."
Tom Crone, the News of the World's head of legal, summarised the information Ms Brooks received from police in an email headed "strictly private and confidential" to the paper's then-editor Andy Coulson on September 15 2006.
The memo concluded: "They're going to contact RW (Rebekah Wade, Ms Brooks's maiden name) today to see if she wishes to take it further."
Mr Jay commented: "This relates to a formal complaint that Rebekah Wade might make in her capacity as victim.
"It is not the more sinister interpretation, whether she wishes to take the investigation into News International further."
Detective Chief Superintendent Philip Williams, who led the Metropolitan Police's original investigation into phone-hacking, agreed, saying: "This is purely: 'You're a potential victim, would you like to join our prosecution?'"
The investigation resulted in the jailing of News of the World royal editor Clive Goodman and private investigator Glenn Mulcaire in January 2007 after they admitted intercepting voicemail messages left on royal aides' phones.
Scotland Yard was widely criticised for limiting the scope of the probe despite evidence from Mulcaire's notebooks that there could be many more hacking victims.
Det Chief Supt Williams agreed there were "some grounds" to suggest that the practice of phone hacking could be more widespread.
But he strongly rejected a suggestion that then-deputy assistant commissioner Peter Clarke restricted the investigation because of an "unhealthy" close relationship between the police and News International.
The detective said: "I don't think it was a factor at all.
"Ultimately, the decision was Mr Clarke's.
"I have worked with him since 2004.
"He is the most professional man that I have ever worked for.
"I have total confidence in his integrity."
He added: "We were all acutely aware of the very difficult decisions that ultimately he would have to make, and the rationale for it, and I do agree with it.
"No-one in my team had any contact with any of the newspapers, and I can assure you at no time in that investigation was it ever an issue."
The inquiry heard that News International was "obstructive" of the police when Goodman and Mulcaire were arrested on August 8 2006.
Det Chief Supt Williams said in a witness statement: "Now that the nature of our investigation was overt, I was not surprised at the lengths that News of the World went to within the law to make sure that we only ever received what they were obliged to provide."
Scotland Yard detectives speculated that Goodman may not have been the only journalist involved in phone hacking, the inquiry heard.
But they did not have firm evidence of this when Mr Clarke decided to limit the scope of the investigation in September or October 2006.
Det Chief Supt Williams said: "We had some grounds to suspect that this could be wider, and that indeed if we undertook certain research we may find something.
"What I didn't know and what I was not clear about is what we would find and actually what it would amount to."
The original phone hacking inquiry was carried out by the Metropolitan Police's SO13 anti-terrorism branch.
Officers were concerned that illegally accessing voicemail messages could be used by terrorists to threaten national security, the inquiry heard.
Det Chief Supt Williams wrote in a memo during the 2006 investigation: "I suspect that the media may well be aware of this vulnerability, and there may well be a host of people using this vulnerability for journalistic purposes.
"The Goodman connection is potentially an example of this.
"But the more sinister side would be the knowledge could be equally utilised by criminals, whether that be in the general sense for terrorism or to threaten national security.
"Therefore I believe that this matter has a significant public interest to it, particularly in terms of safety and security, the ultimate risk being a threat to life."
The detectives concentrated on getting technical evidence that phones had been hacked to avoid members of the royal family having to give evidence in any trial, the inquiry heard.
Det Chief Supt Williams said: "What I didn't want happening, and I documented it in here or in my decision logs, is the issue getting played out in court of who called who, why they were calling these people and what the contents of those messages may well have been because they may have been embarrassing for any reason to my potential victims."
Detective Inspector Mark Maberly, the case officer for the hacking investigation, told the hearing he would have liked to question three other News of the World journalists about illegal voicemail interception.
"There were still lines of inquiry that I would have been keen to follow," he said.
"There would have been aspects of the case that I would have liked to have asked them about, but I had no firm evidence of either their knowledge of voicemail interception or of them tasking Mr Mulcaire."
One voicemail number was called 520 times from suspect phones linked to the News of the World, and a second was called 243 times, figures supplied to police by the O2 network showed.
Mr Maberly said the most-frequently dialled mobile numbers related to the royal household, adding: "Those individuals received the most attention."
Lord Justice Leveson will hear evidence tomorrow from Mr Clarke and fellow former senior Met officers assistant commissioner John Yates and assistant commissioner Andy Hayman.
Mr Yates resigned last July amid criticism of his decision in 2009 not to reopen the phone-hacking investigation after the Guardian published a story revealing that the illegal practice was more widespread than previously believed.
Mr Hayman, who became a columnist for News International paper the Times after retiring from Scotland Yard, was ultimately in charge of the 2006 News of the World inquiry.
Former Scotland Yard commissioner Sir Paul Stephenson, who also resigned over the phone-hacking scandal, was due to give evidence tomorrow, but his session has now been moved to Monday.
Prime Minister David Cameron set up the Leveson Inquiry last July in response to revelations that the News of the World hacked murdered schoolgirl Milly Dowler's phone after she disappeared in 2002.
The first part of the inquiry, sitting at the Royal Courts of Justice in London, is looking at the culture, practices and ethics of the Press in general and is due to produce a report by September.
The second part, examining the extent of unlawful activities by journalists, will not begin until detectives have completed their investigation into alleged phone hacking and corrupt payments to police, and any prosecutions have been concluded.
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