22/09/2011 08:50 BST | Updated 22/11/2011 05:12 GMT

Tom Watson: There's More Gruesome Evidence To Come In The Phone Hacking Scandal

It takes Tom Watson five sentences to crack.

Would he like to be in the shadow cabinet? “No”. Would he like to be the shadow media secretary? “No”. Would he like to be the shadow cabinet secretary? “No”. Would he like to be the cabinet secretary? If Labour were in government, would he like to be in government too? “No, but you should never say never again.”

His reluctance is understandable. For the Labour MP, it’s a case of “I’d never say never because of what I did before.”

“I resigned under Tony Blair and I said I’d never go back. I was persuaded to come back [to government, under Gordon Brown], arguably I shouldn’t have done.”

Watson says that resignation, for which he was branded "disloyal, discourteous and wrong" by Blair, was one of the biggest moments in his political life. But five years later, the MP for West Bromwich is better-known as one of the defining figures in exposing the phone hacking scandal.

In his office there is a framed copy of the News of the World’s final splash: ‘Thank you and goodbye.’ The only obvious reminder of his part in Blair’s leaving office is on his bookshelves. In between a mess of files and folders lies a slim book - ‘The Blair Agenda’.

Watson is confident and articulate. He coolly questioned James and Rupert Murdoch when he appeared before the culture, media and sport select committee two months ago. But he stumbles when talking about his resignation as a junior minister in 2006: “These things are very traumatic. If you thought about it every day it would send you insane.”

But without Watson resigning from government, and speeding up the departure of Blair, he may never have played such a role in the phone hacking scandal.

He has previously revealed how News International journalists had warned him that he would not be forgiven for slighting Blair and that former NI chief Rebekah Brooks would “go after” him for doing so. After they tried to have him removed from the CMS committee alarm bells rang - and he started digging.

Now, he says he is pretty sure phone hacking was “almost institutional” at News of the World and “a normal business practice”.

“In terms of politics it seems to me more and more that there was a narrower focus ...There’s an emerging picture that essentially they were focusing on people they politically disagreed with, rather than they were just looking to break stories and scandals.”

Does he think phone hacking went beyond News of the World?

“Yes ... There’s more I want to say on this but I can’t tell you right now. I think it will be more extensive. I’ve not seen any other evidence that other media groups are involved and I have seen evidence at News International.

“I have seen evidence about the use of private investigators paid for by News International. That’s what I can say.”

He can also say that nearly three months after the initial shock at the range of allegations thrown at News of the World - from hacking into the voicemail of murdered teenager Milly Dowler, the families of bereaved soldiers, and even 9/11 victims - the slew of senior resignations as well as the appearance of Rupert and James Murdoch in front of the CMS committee, it still isn’t over.

“If more people were to go as a result of this scandal it wouldn’t surprise me. Certainly in News International and possibly the Met. There’s a lot more to come. I’m not sure how you can get worse than Milly Dowler but I think some of the stuff will be pretty gruesome. Pretty disgusting.”

The younger Murdoch has already been invited back to the CMS committee to clear up questions about when he knew about evidence of widespread phone hacking and this morning there were further questions of what Brooks knew, and when.

Watson says it is only a matter of time before the shareholders begin to ask questions too.

“The full extent of what went on is only just beginning to permeate the financial institutions that invest in News Corp and their subsidiary companies.

“So you’ve seen in the last few weeks a shareholder revolt in Australia, a class action among investors in the US. It wouldn’t surprise me if, in the not too distant future we see shareholders in the UK – of News International and BSkyB in the UK beginning to speak out. And their focus will be slightly different, I think it will be on corporate governance.”

And there’s no better time to start asking than at News Corp’s October AGM: “All the members are up for re-election. Last September, in 2010, Rupert Murdoch was asked about this and he essentially said the Rupert Murdoch rouge reporter defence. ‘We had this one guy, he was a bad apple, we dealt with it, we took action, we sorted it’.

“When he gave evidence to the committee James Murdoch told essentially told us he was aware of evidence that began to emerge that there was greater wrongdoing. So why didn’t he tell the chairman of News Corp about this? I think the shareholders will begin to question this and expect systems in place.”

And for him, News International still hasn’t changed. He memorably describes the company as “a powerful trans-global multi-million-dollar media-gorilla run like a small, dysfunctional family firm.” The hiring of former News of the World investigation editor, Mazher Mahmood, the ‘fake sheik’ who ensnared Sarah Ferguson, the Duchess of York, in a £500,000 cash-for-access scandal, by the Sunday Times, doesn’t fill him with reassurance.

“They’re spending millions on expensive PR agencies, like Edelman, to convince us that they’ve turned a corner and there is new vigour in what they’re trying to do.

“I’m not convinced yet. Only time will tell.”

But then again, that could just be his bias: “I think the Sunday Times is the worst newspaper in Britain.”

So what’s next for Watson, if not a shadow cabinet role? He says he’ll continue to play a prominent role at the DCMS - and investigate what he says will be the next big scandal, computer hacking.

“Where I think this goes next is the fact that the use of trojans and computers, hacking of computers, is much more widespread in commerce that people know about.

“The information commissioner has been quietly warning about it for a couple of years and everyone’s ignored him.”

The nub of it? “There are some fairly famous and well known institutions who are obtaining information that’s been obtained illegally.”

“We need to look at some big city firms who are going to be caught out having used somewhat legitimate firms who then subcontract, and subcontract, and at the end of it are very bad people who obtain information illegally.

“There is a chain of subcontracting. Sort of, ask no questions, hear no lies.They might not be conscious of it, but they’re certainly not finding out how this information has been obtained. That is an issue for policy makers. I suspect that requires us to endow the information commissioner with greater powers and certainly a bigger investigations budget.”