Former News of the World editor Andy Coulson has taken his ex-employer to the High Court over its refusal to reimburse his legal fees arising from the phone-hacking affair.
Mr Coulson, 43, is suing News International subsidiary News Group Newspapers over the construction of a clause within the severance agreement entered into when he resigned from the paper in February 2007.
His counsel, James Laddie, told Mr Justice Supperstone in London that it stated: "To the extent that it is lawfully able to do so, the employer will pay any reasonable professional (including, without limitation, legal and accounting) costs and expenses properly incurred by the employee after the termination date which arise from his having to defend, or appear in, any administrative, regulatory, judicial or quasi-judicial proceedings as a result of his having been editor of the News of the World."
He asked for a declaration that NGN, which stopped reimbursement in August, "must pay the professional costs and expenses properly incurred" by Mr Coulson "in defending allegations of criminal conduct" during his editorship.
Mr Coulson, who was arrested in July over the allegations and released on bail, resigned as Prime Minister David Cameron's director of communications in January, saying that coverage of the scandal was making it too difficult for him to do his job.
Mr Laddie emphasised: "I should make it clear at this stage that the claimant denies any allegations of wrongdoing."
He said that NGN's broad position was that, whatever the clause meant, it did not cover criminal allegations.
Mr Coulson was not in court for the contested hearing, which is due to last up to a day.