James Murdoch 'shown damning email'

The News of the World's ex-legal manager said today that he told James Murdoch there was "direct and hard evidence" that phone hacking extended beyond a single reporter.

Tom Crone said he showed the News International chairman a printout of the now-notorious "For Neville" email at a meeting on June 10 2008 also attended by the paper's then-editor Colin Myler.

The email contained transcripts of illegally intercepted voicemail messages apparently destined of the News of the World's chief reporter Neville Thurlbeck.

Mr Crone told the Leveson Inquiry into press standards he showed Mr Murdoch a number of documents.

"I cannot remember whether they were passed across the table to him, but I am pretty sure I held up the front page of the email," he said.

"I am also pretty sure that he already knew about it - in terms of it had been described to him already, which I think the other documents that have come out suggest anyway."

Mr Crone also warned Mr Murdoch that News International reporters were implicated in an Information Commissioner's Office investigation into the illegal sale of private data called Operation Motorman, the inquiry heard.

Clive Goodman, the News of the World's former royal editor, was jailed along with private investigator Glenn Mulcaire in January 2007 after they admitted intercepting voicemail messages left on royal aides' phones.

The "For Neville" email apparently contradicted News International's previous stance that phone hacking at the paper was confined to a single "rogue reporter".

Mr Crone said: "What was certainly discussed was the email - not described as For Neville, but the damning email - and what it meant in terms of further involvement in phone hacking beyond Goodman and Mulcaire.

"And what was relayed to Mr Murdoch was that this document clearly was direct and hard evidence of that being the case.

"At the same time, I think I must have referred at some stage to Operation Motorman."

Mr Murdoch has insisted that he was not shown the email or told that it proved phone hacking was more widespread at the News of the World than previously thought.

The meeting with Mr Murdoch was arranged to discuss a claim brought by Professional Footballers' Association chief executive Gordon Taylor over the hacking of his phone by the News of the World, the inquiry heard.

Mr Crone said he only "temporarily" breathed a sigh of relief when the case was settled, adding: "I was expecting another claim, frankly."

Explaining why the paper's publishers agreed to pay Mr Taylor £425,000 plus costs, the lawyer said the company wanted to protect its reputation and reduce the likelihood of further expensive litigation.

Robert Jay QC, counsel to the inquiry, asked him: "This might also be interpreted as, to use a blanket term, a culture of cover-up. Would you accept that?"

Mr Crone replied: "No, I don't think I would. It's a culture of avoiding reputational damage through bad publicity, but it certainly isn't a culture of cover-up if the damning documents are in the police's possession and in fact came from the police."

Mr Crone also said he understood a representative of Madeleine McCann's family gave the News of the World permission to publish the personal diary of the missing girl's mother.

Kate McCann told the inquiry last month that she felt "violated" and like "climbing into a hole and not coming out" when the intensely private journal appeared in the paper on September 14, 2008.

Mr Crone said today: "My understanding was that the representative of the McCanns had given the OK, the permission to the head of the newsdesk at the News of the World, to run the diaries or extracts from the diaries. I think he had emails to support that."

Mr Jay said: "I have seen some documents which on one interpretation of them broadly support what you are saying."

Ex-News International head of corporate and legal affairs Jon Chapman explained why the company paid Goodman nearly £250,000 to settle his claim for unfair dismissal when he was sacked after being jailed.

"The reason for settlement was a tribunal would provide a forum for Mr Goodman, who at that stage we believed had made unsubstantiated allegations, to repeat those allegations and do significant commercial damage to a brand with was trying to recover its reputation," he said.

Former News of the World editor Colin Myler said he "did not recognise" much of the evidence given to the inquiry by Paul McMullan, the paper's ex-deputy features editor.

Mr McMullan told the hearing last month that phone hacking was in the public interest, claimed celebrities often "loved" being chased by journalists, and argued that "privacy is for paedos".

Mr Myler said today: "The criminality that took place, if it did take place, at the News of the World, is one thing, and whatever acts that individuals took part in, the full force of the law should take care of them. I'm sure it will.

"Mr McMullan often drifted off into a world of car chases, hacking phones, blagging, doing rather disagreeable things, and that is no world that I recognise."

Mr Myler took over running the News of the World in January 2007 after Andy Coulson resigned as editor when Goodman and Mulcaire were jailed.

He spoke of losing his job as the Sunday Mirror's editor in 2001 after publishing an interview that led to the collapse of the first criminal trial of footballers Lee Bowyer and Jonathan Woodgate.

"Being an editor is all about learning, and you learn from experience, and sometimes you make the wrong decision. The impact of making the wrong decision as an editor can be severe," he said.

Mr Myler told the inquiry that the News of the World was "humiliated" when former Formula 1 boss Max Mosley was awarded a record £60,000 in privacy damages at the High Court over a story alleging he had a "sick Nazi orgy".

But the former editor defended the article, saying Mr Mosley represented a global membership of 125 million people as president of motorsport governing body the FIA.

"He should have, I believe, displayed ethical standards to merit the status and the position that he had," he said.

"Taking part in and organising orgies, which were brutal and depraved, and included paying women for sex was not, I believe, the ethical standards that the membership of the FIA could reasonably expect."

He added: "The News of the World was humiliated by Mr Mosley's court victory. I was humiliated.

"It was a landmark in how tabloid newspapers would have to approach those kinds of stories."

Mr Myler told the inquiry he would never have published Mrs McCann's diary - which was obtained from a female Portuguese journalist - if he had realised she was not aware of what the paper was planning to do.

He said Ian Edmondson, the News of the World's head of news, told him he had cleared the story with the McCanns' spokesman, Clarence Mitchell.

The former editor said: "Ian Edmondson had assured me on more than one occasion that Clarence was aware of what we were intending to do and had said, 'good'.

"I think it was very clear from Mr Edmondson's point of view how he had spelt out what he was doing.

"And indeed I stressed very clearly by using the phrase that I did not want Kate to come out of church on Sunday morning and find out that the diaries were there without her knowledge."

But inquiry chairman Lord Justice Leveson said a transcript of a phone call between Mr Edmondson and Mr Mitchell about the story the paper was planning was "most clearly ambiguous".

The News of the World published an apology to the McCanns for publishing the diary and made a "substantial" donation to the family's fund to find Madeleine.

Mr Myler said he had Gerry McCann's mobile number and spoke to him frequently about developments in the search for Madeleine.

He said he was "surprised" to hear Mr McCann tell the inquiry last month that Mr Myler was "irate" after the couple gave an interview to Hello! magazine.

The former editor said: "I had no cause at all at any time to berate or be irate with Gerry. Indeed the relationship was such that he would call and thank me for what the News of the World was doing. It was a relationship that I valued."

Prime Minister David Cameron set up the Leveson Inquiry in July in response to revelations that the News of the World commissioned Mulcaire to hack 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 next 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.

PA