Nick Davies's Blog, page 15

The 'For Neville' email: two words that could bring down an empire

James Murdoch now stands accused of complicity in an attempted coverup of crimes within his company

Many angry victims of the News of the World's journalism used to try their hand at suing, and the paper's battle-hardened lawyers were good at seeing them off. Still they regularly paid out £1.2m a year on a variety of libel claims.

But in May 2008, Tom Crone, the paper's veteran head of legal, got a nasty shock. His opponents in one lawsuit against the paper suddenly appeared to have got hold of a smoking gun.

It was a piece of evidence that seemed to guarantee that the complainant in question, Gordon Taylor of the Professional Footballers' Association, could virtually write his own cheque in privacy damages and blow a major hole in the tabloid's budget.

Worse, much worse, was the fact that this single document, later christened the "For Neville" email, was capable of wrecking all the previous NoW efforts to cover up its hacking scandal. In the end, this piece of evidence would not only cost Crone his own job, but also help destroy the entire newspaper for which he worked, the flagship of Rupert Murdoch's British fleet.

News of the "For Neville" email originally arrived on Crone's desk at Wapping, in the form of an "amended particulars of claim" from Taylor's lawyers, dated 12 May 2008. It used dry legal language, but Crone immediately saw its force.

It detailed the contents of one of the documents seized in the raid on Glenn Mulcaire, the News of the World's private detective who had recently been jailed for phone hacking along with "rogue reporter" Clive Goodman. What it revealed was the way senior staff at the NoW had been involved in systematic hacking – the very thing the paper had been strenuously denying all along, not only to Taylor's lawyers, but to its readers, parliament and public. The legal pleadings said: "Prior to 29th June 2005, Mr Ross Hindley acquired a transcript of 15 messages from the claimant's mobile phone voicemail and a transcript of 17 messages left by the claimant on Ms Armstrong's [a business associate of Taylor] mobile phone voicemail. At all material times, Mr Hindley was a journalist employed by NGN working for the News of the World."

"By email dated 29th June 2005, Mr Ross Hindley emailed Mr Mulcaire a transcript of the aforesaid 15 messages from the claimant's mobile phone voicemail and 17 messages left by the claimant on Ms Armstrong's mobile phone voicemail. The transcript is titled 'Transcript for Neville' and the document attached to the email was called 'Transcript for Neville'. It is inferred from the references to Neville that the transcript was provided to, or was intended to be provided to, Neville Thurlbeck. Mr Thurlbeck was at all material times employed by NGN as the News of the World's chief reporter."

Taylor's lawyers had obtained a copy of the "For Neville" email, with its lists of carefully transcribed hacked private messages, from the police under a court order. It was one of the 11,000 files seized from Mulcaire that were mouldering in bin bags since Scotland Yard had been persuaded to drop their pursuit of a case so potentially embarrassing to their tabloid journalist friends. Crone must have been shocked to realise the incriminating nature of the information the Metropolitan police possessed which could be used in future against his own employers.

Faced with such a crisis, Crone decided he had to consult his new boss, who was to authorise a huge, secret payout which buried the "Neville" dossier. He went to see the abrasive and self-confident younger son of the proprietor, 36-year-old James Murdoch.

Rupert's offspring had arrived in December 2007 as chief executive of News International, the company that controls all four Murdoch UK papers, the NoW, the Sun, the Times and Sunday Times. He had not been around when the original hacking affair erupted the previous year with the jailing of two employees, and presumably knew little of its history. At this week's parliamentary hearing, his octogenarian father hastened to protect James when the subject came up, saying his son had only been in charge of the papers for "a very few weeks".

But the truth about who said what in the subsequent conversation with James now threatens to derail not just one paper, but the whole of Rupert Murdoch's dynastic ambitions.

Neither side disputes that James, without telling his father, agreed to hand over almost £1m of the company's money for a settlement that was to be kept totally confidential: £300,000 charged by their own outside lawyers, another £220,000 for the fees of Gordon Taylor's lawyers, and a monster payoff of £425,000 in personal damages to Taylor. This was a sum almost twice the £250,000 that, according to James, outside counsel had advised was the likely damages Taylor could get if he won at trial. On the face of it, the deal made little commercial sense.

James, previously regarded as the heir apparent, now stands accused of complicity in an attempted coverup of crimes within his company. If that turns out to be true, it will be fatal for James' ambition, and also open him to a raft of legal dangers, as lawsuits proliferate against the Murdoch empire.

For the contents of the "For Neville" email are so obviously toxic that James, a reluctant witness, last week emphatically testified to MPs on the culture, media and sport committee and that he was never told about its existence.

Crone, with all his authority as the tabloid group's most long-serving and senior consigliere, at once publicly contradicted him. Crucially, Crone has the support of the third man at the crucial meeting. This was Colin Myler, the then editor of the NoW, who issued a formal statement jointly with Crone on Thursday, backing the lawyer's version of events.

John Whittingdale, the committee chairman, is demanding to know whether his committee has, yet again, been misled, and Tom Watson, the Labour MP who extracted James Murdoch's disputed testimony, has notified the police.

The gauntlet has been thrown down to Rupert Murdoch and his son this weekend, in the most melodramatic fashion yet.

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Phone hacking: Tom Crone and Colin Myler raise the stakes

Colin Myler and Tom Crone are, in effect, accusing James Murdoch of being part of the phone-hacking cover-up

Tom Crone and Colin Myler must have been well aware that the statement they were about to make could prove fatal to James Murdoch.

When the Guardian pointed out in the wake of his parliamentary testimony that Murdoch's son had sought to blame them for concealment, a friend of the two men said: "To contradict James will be as good as coming out and calling him a liar."

Myler and Crone, the News of the World's then editor and News International's top newspaper lawyer, both of whom have lost their jobs in the wake of the phone-hacking affair, subsequently spent the day debating what to do.

If their statement of Thursday nightis correct, then Rupert's son will have proved to have misled parliament. It will also have destroyed the Murdoch family's last line of defence against the scandal: that they knew nothing, and had been betrayed by those underlings they trusted.

News Corporation insisted in a statement on Thursday night that James Murdoch stood by his testimony. But both sides cannot be correct.

Myler and Crone are, in effect, jointly accusing James Murdoch of being part of the cover-up, one in which the company's executives vainly twisted and turned to conceal the truth about phone hacking and blame it on a single "rogue reporter".

James Murdoch's crucial claim to the committee was that although he had personally agreed to a massive payout of £700,000 to hacking victim Gordon Taylor, he had done so in ignorance of the true facts. He said Crone and Myler had told him the payout was legally necessary.

The Labour MP Tom Watson, one of the affair's most persistent investigators, then extracted from Murdoch towards the end of the session what has now proved to be an incendiary claim.

Murdoch, sitting alongside his father Rupert, claimed that Crone and Myler had concealed from him the crucial piece of evidence in the case: that an email had come to light with a voicemail hacking transcript, marked "for Neville" [Neville Thurlbeck, the News of the World's chief reporter].

The existence of this email, had it been made public at the time, would have exploded the "rogue reporter" defence and begun to implicate the rest of the NoW newsroom. It was, and is, the smoking gun in the whole hacking case.

This was the exchange:

Watson: "James – sorry, if I may call you James, to differentiate – when you signed off the Taylor payment, did you see or were you made aware of the full Neville email, the transcript of the hacked voicemail messages?"

James Murdoch: "No, I was not aware of that at the time."

Watson may have been slightly mistranscribed: he may have said the "for Neville" email.

However, James Murdoch's response contained no slip of the tongue. When the Guardian subsequently queried his version of events with his office, they provided a written statement repeating it. It said: "In June 2008 James Murdoch had given verbal approval to settle the case, following legal advice. He did this without knowledge of the 'for Neville' email."

John Whittingdale, chairman of the culture sport and media select committee, said, ominously, on Thursday night: "We as a committee regarded the 'for Neville' email as one of the most critical pieces of evidence in the whole inquiry. We will be asking James Murdoch to respond and ask him to clarify."

In police inquiries, the most sensitive moment is generally considered to be when those involved start to turn on one another. James Murdoch and the then News International chief executive Rebekah Brooks had turned on Crone and Myler – particularly the long-serving Crone – in their testimony.

James told the MPs that Brooks had removed Crone from his job. Brooks then testified that Crone was apparently the only former NoW employee for whom there would be no new job found after the sudden closure of the title.

By adding that the Murdoch family had personally been kept in ignorance of the "for Neville" email, James was pointing the finger at the two men as, in effect, sole architects of a cover-up.

The two had already been put in an exposed position when they testified to one of the Whittingdale committee's earlier hearings in 2009 that James Murdoch had been personally appraised of the huge Gordon Taylor settlement. Myler had protested that 2,500 emails had been rigorously examined, and no evidence of further wrongdoing had been found. But the committee report suggested News International had been engaged in buying Gordon Taylor's silence.

Before Crone and Myler threw down their challenge to the testimony of Rupert Murdoch's son, analysis of James' parliamentary evidence had already revealed inconsistencies.

James claimed to the MPs that he had accepted legal advice that Gordon Taylor's lawsuit was worth £250,000 in damages. But he failed to explain why the company went on to pay the hacking victim almost twice as much: £425,000, plus costs.

The News of the World executives had originally rejected Taylor's claim for damages altogether.

But in May 2008, they changed their tune abruptly, when Taylor's lawyers got hold of the "For Neville" email. They offered £50,000, then £150,000, if Taylor would drop the case. In June 2008, when Crone and Myler went to get permission from James Murdoch for an even bigger payout, the offer went up to £350,000, then £400,000.

According to earlier testimony from Taylor's lawyer, the NoW team demanded a special confidentiality clause: that the court file would be sealed and Taylor was not to reveal that a confidential settlement of any kind had been made. This served to hush up the existence of the deal. James tried to persuade the MPs that such a deal was perfectly normal.

In a scandal where, it had seemed, the stakes could go no higher, Crone and Myler's defiant statement has raised them to new heights. James Murdoch's whole corporate future has been called into question in the most dramatic fashion.

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Media Talk podcast: Phone-hacking special

In a special live edition of our Media Talk podcast, Matt Wells is joined by Alan Rusbridger, Nick Davies, Jonathan Freedland and Jane Martinson to look at the latest developments in the phone-hacking scandal, including 'the most humble day' of Rupert Murdoch's life as he took his seat in front of the select committee, and David Cameron's continuing attempts to exorcise the ghost of Andy Coulson.

Plus, Vanity Fair's Sarah Ellison updates us on the gathering storm in America as News Corporation fights to save its reputation.

It's a fast-moving story and you can follow all the latest events here.

This event was brought to you by Guardian Extra, the membership scheme for readers of the Guardian and Observer.

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James Murdoch: hack victim's payout sparks queries over hush-money denial

Despite telling parliamentary committee that astronomical sums were not paid, total cost of Gordon Taylor case to NI was £1m

James Murdoch appears to have given misleading parliamentary testimony about a key phone-hacking cover-up, according to evidence obtained by the Guardian.

Rupert Murdoch's son sought to deny that "astronomic sums" had been secretly paid out to a hacking victim as hush-money. He told MPs the company's legal advice was that the likely award of damages was £250,000, and that this explained the size of a confidential payout he agreed could be paid in 2008 to hacking victim Gordon Taylor, chief executive of the footballers' union the PFA.

But full details of the legal negotiations obtained by the Guardian show that in fact Murdoch's company executives paid far more than that to buy Taylor's silence. After consulting James Murdoch, they eventually agreed to pay £425,000 damages, almost twice as much as the alleged likely award.

With Taylor's legal costs at £220,000, and their own solicitors' fees of some £300,000, the total cost to the News of the World to keep the case out of court amounted to almost £1m.

This huge confidential settlement succeeded in concealing the fact, detailed in the lawsuit papers, that Neville Thurlbeck, the paper's chief reporter, was implicated by an email referring to "Neville". Police had been forced to hand over a copy of this email to the other side's lawyers.

James Murdoch further claimed to the MPs that this email had been concealed from him by two company executives, the lawyer Tom Crone and the editor Colin Myler, when he was persuaded to sign off the secret deal.

Had the email come to light at the time, it would have destroyed the News of the World's public stance that phone hacking was the work of a single "rogue reporter" who had already been jailed.

The details of the negotiations between Taylor and the News of the World also show that James Murdoch was incorrect in assuring MPs that the confidentiality deal was normal.

Sources familiar with the negotiations say that not only was the size of the settlement to be kept confidential, but that News International also got an agreement that the very fact of a confidential settlement was also to be kept confidential.

This was so unusual that a special court hearing by a judicial figure, Deputy Master Mark, had to be held in September 2008, before it was agreed that the court file could be sealed, because it possibly contained evidence of criminal behaviour.

James Murdoch was accompanied by his father, Rupert, at the culture, media and sport committee hearing. Rupert told the MPs his son had only been in charge of the News of the World for a few weeks when he was persuaded to agree to the secret payoff. Crone and Myler have since lost their jobs. Neither responded last night to requests for comment.

James Murdoch told MPs that Myler and Crone told him "outside legal advice had been taken on the expected quantum of damages … the amount paid rested on advice from outside counsel on the amount we would be expected to pay in damages, plus expenses and litigation costs … we had senior distinguished outside counsel to whom we had gone to ask, 'If this case were litigated, and if the company were to lose the case, what sort of damages would we expect to pay?' The company received an answer that was substantial … Their advice was that the damages could be £250,000 plus expenses and litigation costs, which were expected to be between £500,000 and £1m."

James did not explain to the MPs why he was willing to pay far more than the going rate in damages to keep the case out of the public courtroom. On his version of events, the company ended up paying just as much to stop the case as if they had gone on to make a fight of it and lost. In commercial terms, the deal apparently made no sense.

The history of the negotiations was as follows, according to the Guardian's evidence. It appears to show the News of the World was willing to pay almost any price to hush up the case.

• In early 2008, Taylor's lawyers obtained evidence of the "Neville" email. NoW, which had been refusing to pay up, immediately offered to settle. By 9 May 2008, NoW raised its £50,000 offer to £150,000. This contrasted with the previous highest comparable award of £14,600 to Catherine Zeta Jones.

• By 9 June, the offer was increased to £350,000. Taylor refused. By now Crone and Myler had approached James Murdoch and orally asked permission to offer more, saying counsel had advised the case could be worth £250,000. Murdoch says they never told him of the "Neville" email.

• By mid July, the offer was raised to £400,000, making £610,000 in total, including costs. NoW wanted a draconian confidentiality clause, however.

On 24 July 2008, the Max Mosley privacy case was won, with an award of only £60,000. On the same day, according to James Murdoch's office, Taylor's lawyers decided to accept the £400,000 offer in principle. It would have looked huge.

Nevertheless, sources familiar with the deal say the Taylor payout was eventually further slightly increased by the final settlement which came around 8 August 2008.

The company said last night: "News Corporation's management and standards committee has looked in detail at the Gordon Taylor settlement. In response to media inquiries, the MSC can confirm that News Group Newspapers and Mr Taylor agreed final financial terms on 10 July 2008, two weeks before the Max Mosley decision.

"In June 2008, James Murdoch had given verbal approval to settle the case, following legal advice. He did this without knowledge of the 'for Neville' email. All other details, including any confidentiality clauses, are bound by a confidentiality agreement."

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Phone hacker Glenn Mulcaire loses News International legal fees backing

Decision means Glenn Mulcaire may now name all the names of those at News of the World who instructed him to hack phones

News International has terminated "with immediate effect" its arrangement to pay the legal fees of Glenn Mulcaire, the private investigator at the centre of the phone-hacking scandal.

It comes after James Murdoch told the Commons culture, media and sport select committee he was "as surprised as you are" when he discovered "certain legal fees were paid to Mr Mulcaire" by the News of the World publisher. News International refused to say if it was still paying the legal fees of members of News of the World staff currently on bail.

The decision means Mulcaire may now name all the names of those at the News of the World who instructed him to hack phones. News International had been paying his costs for an appeal against a high court ruling that he should answer questions put to him by victims of hacking who are suing him and the News of the World.

The News Corporation management and standards committee (MSC) met on Wednesday morning and decided to terminate the arrangement.

It said: "News Corporation's management and standards committee met this morning and has decided to terminate the arrangement to pay the legal fees of Glenn Mulcaire with immediate effect.

"The MSC is authorised to co-operate fully with all relevant investigations and inquiries in the News of the World phone-hacking case, police payments and all other related issues across News International as well as conducting its own inquiries where appropriate."

It is not clear whether the payments will stop immediately. It is open to Mulcaire's legal team to argue that, in effect, they have a contract with News International who had agreed to pay for his costs in defending himself against legal actions and also to pay for his appeal.

Lawyers for Mulcaire and News International are expected to negotiate an agreement, with Mulcaire pressing for a "period of reasonable notice" during which the payments would continue.

Mulcaire was first ordered to answer questions in November last year. Lawyers acting for Nicola Phillips, a PR consultant who used to work for Max Clifford, secured a court order that he must disclose the identity of the person who instructed him to intercept her voicemail and that he must specifically say whether the then news editor of the News of the World, Ian Edmondson, had asked him to investigate Ms Phillips or other people connected with Max Clifford. A similar order was then made in the case brought by Steve Coogan.

However, News International then paid Mulcaire's legal fees to appeal against the rulings, apparently contradicting its public stance that it wanted the truth to be told about the affair.

Mulcaire is believed to have worked frequently with middle-ranking editorial executives, who are already the subject of police inquiries. Former News of the World journalists say it is highly unlikely that he had contact with senior editors such as Andy Coulson and Rebekah Brooks, and certainly not with senior management.

Mulcaire, who was jailed for intercepting voicemails on phones used by aides to Princes William and Harry, has run up a legal bill of hundreds of thousands of pounds as he battles ongoing lawsuits.

He worked under contract for the News of the World until 2006, and took careful notes of who at the newspaper commissioned his services. Paperwork from his office was seized by the Met as part of the investigation into Mulcaire and former royal editor Clive Goodman. Both men were jailed in January 2007, with Mulcaire receiving a six-month sentence.

The question of whether Mulcaire's fees were being paid by NI was raised on Tuesday by Labour MP Paul Farrelly, who asked: "Is the organisation still contributing to Glenn Mulcaire's legal fees?"

James Murdoch replied: "As I said earlier Mr Farrelly, I don't know the precise status of that now but I do know that I asked for those things – for the company to find a way for those things to cease with respect to these things."

When asked by Farrelly whether News International should stop contributing to Mulcaire's legal fees, James Murdoch said: "I would like to do that. I don't know the status of what we are doing now or what his contract was."

Farrelly then asked Rupert Murdoch the same question. "Provided we are not in breach of a legal contract, yes," Mr Murdoch replied.

James Murdoch was asked would he let the committee know, and replied: "I'm happy to follow up with the committee on the status of those legal fees."

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Behind Rupert and James Murdoch's gloss, an intensely serious defence

Rupert Murdoch and son James let some moral blame through but had to repel anything resembling criminal responsibility

At one point on Tuesday afternoon, the Murdochs were asked what coaching they had received in preparation for the hearing. "We were told to tell the truth, to be as open and as transparent as possible," came the reply. It was a little more sophisticated than that.

Their performance strongly suggested that the besuited consiglieri in the row behind them had earned their fees. There were signs of two kinds of advice – a PR strategy and a legal defence. Both were all about crafting an escape from a tight and unpleasant corner.

The foundation stone of the PR strategy was humble apology. James Murdoch interrupted his first answer to say how sorry he was, how great his regret was. Rupert Murdoch interrupted his son's apology to make his own. "This is the most humble day of my life," he said. Twice. PR consultants around the planet would spot the soundbite there, uttered by Mr Murdoch but written surely by an expert.

They continued to apologise at all available intervals. Rupert, in particular, volunteered that he had been absolutely shocked, appalled and ashamed to hear of the hacking of the phone of Milly Dowler. This, in turn, proved to be part of a wider strategy – a non-aggression pact with everyone. The MPs on the committee; their tormentors on the Guardian; the lawyers who have hauled them through the courts: none were to be attacked. Murdoch Sr sat with head bowed and his hands clasped. Murdoch Jr – whose temper is globally famous – was a model of deference and courtesy.

Only once did Murdoch Sr stray from the pacific script, when he snarled against "all our competitors trying to build up this hysteria". But he soon compensated with two extra PR gambits. He recalled his father as a heroic journalist, who had exposed the truth about Gallipoli (though cynics say Sir Keith fixed the evidence), and then he made a brilliant grab for the friendship of the committee by recommending Singapore's approach to clean politics, which would involve paying MPs $1m a year. They laughed. He smiled. That's PR.

But behind that gloss, there was an intensely serious and carefully organised defence. They allowed some moral blame to get through – hence the humility – but at all costs they had to repel anything that looked remotely like criminal responsibility.

For Rupert Murdoch, this was simple. Essentially, he worked too high up the ladder to see the ground. He had 52,000 employees, and the News of the World accounted for less than 1% of News Corp, he explained. Twice.

And so it was that he had never known that in March 2003 his editor, Rebekah Brooks, had told this same select committee that her journalists had paid police in the past; and he didn't know why no one had investigated this interesting confession; and he had never heard that the judge who presided over Max Mosley's action for privacy in 2008 had accused the News of the World's chief reporter, Neville Thurlbeck, of blackmailing two prostitutes in the case; and he didn't know that his son had authorised more than £1m to be paid to settle the case of Gordon Taylor; and he didn't know that his subsidiary company had authorised another £1m to settle the case of Max Clifford; and he didn't know that last year, this same select committee had accused executives from News International of suffering from "collective amnesia". He couldn't even remember what he had ever discussed with Tony Blair. "We argued about the euro," I think.

For James Murdoch, the defence was more complex. He was not so high up the ladder and was specifically responsible for minding the family business in the region which included the UK. He took a chronological approach, using a different blockade for each phase, to separate himself from culpability.

How could he not have known that in 2007, after the trial of the News of the World's royal correspondent and private investigator, there was evidence that other NoW journalists were involved in hacking? That was easy. He had not been there. But Les Hinton had been there, as chairman of News International (and as Rupert's trusted friend and adviser). What did he know? James didn't know that either. Hadn't he asked Hinton what he knew? No, he hadn't.

But what about 2008, when he personally approved the settlement of the legal action brought by the chief executive of the Professional Footballers' Association, Gordon Taylor, and two associates? "It's a good question," replied James. "I'm happy to discuss the case of the out-of-court settlement with Mr Taylor." This was potentially tricky.

On the one hand, it is a matter of record that the NoW settled the case after a judge ordered police to disclose evidence they held, including an email from a NoW reporter for the attention of Thurlbeck, containing the transcripts of 35 intercepted voicemail messages. This was the smoking gun, which led to the NoW settling the case. On the other hand, James Murdoch's position was that he had not had any evidence of that kind at the time. If he didn't know about the "email for Neville", why did he settle the case? If he did know about it, why didn't he tell the police?

The answer lay with the lawyers, he said. He had been told that the NoW's outside counsel had advised them that they were bound to lose the case – but he had never been told why. He had paid out more than £1m in damages and legal fees without knowing what evidence compelled him to do so.

Beyond this, he insisted, he had known nothing of the illegal activity at the paper until the legal action brought by Sienna Miller in December last year forced the disclosure of paperwork.

Until then, he had relied on the advice of three groups of people. First, Scotland Yard, which had said repeatedly there was no new evidence and no need to reopen the inquiry. He made no reference to the evidence last week of senior Yard officers who said they had been unable to obtain evidence of the crime at the paper, because News International had lied to them and obstructed them.

Second, the Press Complaints Commission, which had produced a report saying there was no evidence that anyone other than Clive Goodman had been involved in crime at the NoW. He made no reference to the recent blunt statement by the chair of the PCC, Lady Buscombe, that the News of the World had lied to them. Finally, he cited the report of a highly reputable law firm, Harbottle and Lewis, which had inspected a collection of NoW emails and declared they revealed no evidence of crime. More recently, those emails have been handed to police, and the ex-DPP Lord Macdonald has said they contain evidence of indirect hacking and serious crime. He hadn't known that, he said, until this spring. Two other executives had handled them at the time, but both of them had left.

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Phone-hacking spotlight falls on Met PR man, Dick Fedorcio

Director of public affairs faces heavy scrutiny by MPs at select committee over links between Scotland Yard and NI

The search for the truth about the ties that bind Scotland Yard to News International is now likely to focus on the role of one man: Dick Fedorcio, director of public affairs for the Metropolitan police.

Normally in the wings, Fedorcio will enter the bright lights of the home affairs select committee on Tuesday to answer questions about his role in the background to the phone-hacking scandal.

Guardian inquiries suggest that his 14 years at the head of the Yard's media operation made him a powerful figure, able to intervene in policy decisions; and that he has a history of particular closeness with the News of the World.

There is no evidence Fedorcio has done anything wrong, but there are troubling questions on which MPs want his help:

• Was Scotland Yard's failure to get to the truth in the original investigation in 2006 simply a case of incompetence (which is, in effect, their defence), or did the Yard deliberately cut short that inquiry as a favour to powerful friends at News International? MPs will want to know whether Fedorcio formally or informally had any influence over the decision.

• Was Scotland Yard's rapid decision to refuse to reopen the case in July 2009 influenced in any way by its close links with the News of the World? In relation to that controversial decision, was there any form of contact between Fedorcio and anyone at News International?

• Did Fedorcio play any role at all in the subsequent police statements to parliament, press and public which, we now know, included falsehoods, half-truths and evasions?

Fedorcio, 58, is a conservative figure, with a rugby player's chest and a businessman's suit, who was given an OBE in 2006. He rose through the ranks of local government PR (at the Greater London council, West Sussex, and Kent) and took over as head of public affairs at the Yard in September 1997, shortly before the arrival as deputy commissioner of John Stevens, who became a close ally. When Stevens became commissioner in 2000, the two men set out to find allies in Fleet Street, particularly among the conservative tabloids and the Daily Mail.

Fedorcio was far less close to Stevens's successor, Ian Blair. Indeed, several Yard sources claim that Fedorcio disliked the new commissioner. But his job gave him power: specifically, a seat on the elite senior management team which oversees major operational decisions and where Fedorcio's voice is said to be highly influential.

The fact of his link to Fleet Street reinforced that power. Like the PR heads of other organisations, he is said to have freely intervened on policy issues, changing strategy in search of better press coverage. One source recalls him sitting in with the July Review Group dealing with the aftermath of the shooting of Jean Charles de Menezes, and effectively chairing a meeting, even though he had no operational standing.

Those who have worked closely with Fedorcio all agree he is particularly close to Rebekah Brooks, who was editor of the News of the World and then of the Sun; and to Lucy Panton, the News of the World's crime correspondent. They say Fedorcio sometimes has caused friction with his press officers by providing the News of the World with information in preference to other newspapers.

MPs will want to know whether Fedorcio's close working link with Brooks influenced the Yard's decision to take no action when they discovered that a News of the World executive, Alex Marunchak, had apparently used the paper's resources to mount surveillance on a senior officer, DCS Dave Cook, acting on behalf of two men who were suspects in a murder investigation being led by Cook.

Fedorcio was present at a meeting when DCS Cook and his commander, Andre Baker, confronted Brooks with details of the surveillance, which could have been regarded as an attempt to pervert the course of justice.

The surveillance included following DCS Cook and his children; "blagging" personal data from confidential police databases; and attempting to access his voicemail and that of his wife.

Cook subsequently suspected that "Trojan horse" emails may have been sent to his computer, though no confirmation was ever found.

Fedorcio's personal links with the News of the World are part of a wider picture of close alliance. When John Stevens stepped down as commissioner in 2005 he was given a job as a columnist at the News of the World (a post that was secured, according to Yard sources, by Fedorcio).

When Ian Blair took over as commissioner his son was allowed to go on work experience at News International.

When Andy Hayman, the assistant commissioner in charge of the original phone-hacking inquiry, left under a cloud, he was given a job as a columnist on the Times, who also bought the serial rights to his memoirs.

Fedorcio is believed to have approved the highly controversial decision in September 2009 to hire the News of the World's former deputy editor, Neil Wallis, as a part-time media consultant at the same time as the paper was being publicly accused of crimes committed when Wallis worked there. It is still not clear whether Wallis had any influence over the Yard's handling of the affair.

Phone hackingMetropolitan policePoliceNewspapers & magazinesNational newspapersNewspapersHouse of CommonsNick Davies
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Sean Hoare knew how destructive the News of the World could be

The courageous whistleblower who claimed Andy Coulson knew about phone hacking had a powerful motive for speaking out

At a time when the reputation of News of the World journalists is at rock bottom, it needs to be said that the paper's former showbusiness correspondent Sean Hoare, who died on Monday, was a lovely man.

In the saga of the phone-hacking scandal, he distinguished himself by being the first former NoW journalist to come out on the record, telling the New York Times last year that his former friend and editor, Andy Coulson, had actively encouraged him to hack into voicemail.

That took courage. But he had a particularly powerful motive for speaking. He knew how destructive the News of the World could be, not just for the targets of its exposés, but also for the ordinary journalists who worked there, who got caught up in its remorseless drive for headlines.

Explaining why he had spoken out, he told me: "I want to right a wrong, lift the lid on it, the whole culture. I know, we all know, that the hacking and other stuff is endemic. Because there is so much intimidation. In the newsroom, you have people being fired, breaking down in tears, hitting the bottle."

He knew this very well, because he was himself a victim of the News of the World. As a showbusiness reporter, he had lived what he was happy to call a privileged life. But the reality had ruined his physical health: "I was paid to go out and take drugs with rock stars – get drunk with them, take pills with them, take cocaine with them. It was so competitive. You are going to go beyond the call of duty. You are going to do things that no sane man would do. You're in a machine."

While it was happening, he loved it. He came from a working-class background of solid Arsenal supporters, always voted Labour, defined himself specifically as a "clause IV" socialist who still believed in public ownership of the means of production. But, working as a reporter, he suddenly found himself up to his elbows in drugs and delirium.

He rapidly arrived at the Sun's Bizarre column, then run by Coulson. He recalled: "There was a system on the Sun. We broke good stories. I had a good relationship with Andy. He would let me do what I wanted as long as I brought in a story. The brief was, 'I don't give a fuck'."

He was a born reporter. He could always find stories. And, unlike some of his nastier tabloid colleagues, he did not play the bully with his sources. He was naturally a warm, kind man, who could light up a lamp-post with his talk. From Bizarre, he moved to the Sunday People, under Neil Wallis, and then to the News of the World, where Andy Coulson had become deputy editor. And, persistently, he did as he was told and went out on the road with rock stars, befriending them, bingeing with them, pausing only to file his copy.

He made no secret of his massive ingestion of drugs. He told me how he used to start the day with "a rock star's breakfast" – a line of cocaine and a Jack Daniels – usually in the company of a journalist who now occupies a senior position at the Sun. He reckoned he was using three grammes of cocaine a day, spending about £1,000 a week. Plus endless alcohol. Looking back, he could see it had done him enormous damage. But at the time, as he recalled, most of his colleagues were doing it, too.

"Everyone got overconfident. We thought we could do coke, go to Brown's, sit in the Red Room with Paula Yates and Michael Hutchence. Everyone got a bit carried away."

It must have scared the rest of Fleet Street when he started talking – he had bought, sold and snorted cocaine with some of the most powerful names in tabloid journalism. One retains a senior position on the Daily Mirror. "I last saw him in Little Havana," he recalled, "at three in the morning, on his hands and knees. He had lost his cocaine wrap. I said to him, 'This is not really the behaviour we expect of a senior journalist from a great Labour paper.' He said, 'Have you got any fucking drugs?'"

And the voicemail hacking was all part of the great game. The idea that it was a secret, or the work of some "rogue reporter", had him rocking in his chair: "Everyone was doing it. Everybody got a bit carried away with this power that they had. No one came close to catching us." He would hack messages and delete them so the competition could not hear them, or hack messages and swap them with mates on other papers.

In the end, his body would not take it any more. He said he started to have fits, that his liver was in such a terrible state that a doctor told him he must be dead. And, as his health collapsed, he was sacked by the News of the World – by his old friend Coulson.

When he spoke out about the voicemail hacking, some Conservative MPs were quick to smear him, spreading tales of his drug use as though that meant he was dishonest. He was genuinely offended by the lies being told by News International and always willing to help me and other reporters who were trying to expose the truth. He was equally offended when Scotland Yard's former assistant commissioner, John Yates, assigned officers to interview him, not as a witness but as a suspect. They told him anything he said could be used against him, and, to his credit, he refused to have anything to do with them.

His health never recovered. He liked to say that he had stopped drinking, but he would treat himself to some red wine. He liked to say he didn't smoke any more, but he would stop for a cigarette on his way home. For better and worse, he was a Fleet Street man.

News of the WorldAndy CoulsonPhone hackingNewspapers & magazinesNational newspapersNewspapersNick Davies
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Sir Paul Stephenson's resignation: the facts behind the statement

Met chief attempted to explain his failings but the evidence he missed was in plain sight
• The resignation statement in full

In his resignation statement, Sir Paul Stephenson struggled to come to terms with the facts that have trapped him.

First, he attempted to deal with his relationship with Neil Wallis, the former deputy editor of the News of the World, who was arrested last week, provoking Scotland Yard to confess they had been paying him for his PR advice from October 2009 to September 2010.

Stephenson began with a claim which may well be correct: "I have heard suggestions we must have suspected the alleged involvement of Mr Wallis in phone hacking. Let me say unequivocally that I did not and had no reason to have done so."

But he went on to draw a conclusion that was not so sound, claiming "the contracting of Mr Wallis only became of relevance when his name became linked with the new investigation into phone hacking".

That seriously misstated the problem, which is that the Metropolitan Police chose to hire the former second-in-command of an organisation while that organisation was being publicly accused of criminal activity.

Furthermore, the Met paid Wallis to advise them on media strategy at a time when his former organisation was the subject of intense press scrutiny; and failed to inform their political masters of Wallis' role with them at a time when their handling of the investigation of his organisation was buzzing with political controversy.

Second, Stephenson attempted to explain how it was that he had failed to discover the truth about the hacking at the News of the World and about Scotland Yard's mishandling of the affair.

He was, he said, an outsider: "I do not occupy a position in the world of journalism; I had no knowledge of the extent of this disgraceful practice and the repugnant nature of the selection of victims that is now emerging; nor of its apparent reach into senior levels."

Sadly, the truth about the extent of the dreadful practice was available much closer to home. Three months before Scotland Yard hired Wallis, in July 2009, the Guardian was able to discover that there were "thousands" of victims of the News of the World's hacking, by speaking privately to one of Sir Paul's closest colleagues at Scotland Yard.

If he felt unable to ask his own people, he might have turned instead to the widely-reported statement by the director of public prosecutions, in the same month, that there had been so many potential offences that the prosecution had to limit the number of charges to prevent the case becoming "unmanageable".

Alternatively, he could have read the report of the culture, media and sport select committee, published in February 2010, which said the committee found it "inconceivable" the News of the World's former royal correspondent was the only journalist involved; and which found that Wallis' former close colleagues from the senior levels of the News of the World were suffering from "collective amnesia".

In the same way, Stephenson claimed, he knew nothing of the failure of his own organisation: "I had no reason to doubt the original investigation into phone hacking … I was unaware that there were any other documents in our possession of the nature that have now emerged."

All he had to do was ask his assistant commissioner, John Yates, who discovered that the mass of material seized from the News of the World's private investigator had never been fully searched; or he could have read the Guardian.

In February 2010, the Guardian was reporting: "Scotland Yard simply did not investigate the mass of paperwork, computer records and audio tapes which they had seized from Mulcaire and Goodman. A small sample of this evidence which has been seen by the Guardian shows that, among those who were targeted by Mulcaire, were the deputy prime minister, John Prescott; George Michael; Jade Goody; Kate Middleton; Princess Michael of Kent; and Iorworth Hoare, a rapist who won the lottery."

By April, the Guardian was publishing full-frontal attacks on the Met's original investigation: "Something very worrying has been going on at Scotland Yard. We now know that in dealing with the phone-hacking affair at the News of the World, they cut short their original inquiry; suppressed evidence; misled the public and the press; concealed information and broke the law."

In the background, the culture committee reinforced the point, complaining that the Met had been wrong not to investigate evidence which implicated two senior journalists at the paper: "These matters merited thorough police investigation … The Met police's reasons for not doing so seem to us to be inadequate."

At one point in his statement, Stephenson appeared to recognise that much of what he missed had been published along the way. "One can only wonder about the motives of those within the newspaper industry or beyond who now claim that they did know but kept quiet. Though mine and the Met's current severe discomfort is a consequence of those few who did speak out, I am grateful to them for doing so."

Sir Paul StephensonJohn YatesMetropolitan policePolicePhone hackingNews of the WorldNick Davies
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Rebekah Brooks and the Murdochs: questions that need answering

MPs on the select committee quiz the three on Tuesday – here are some suggested lines of questioning

MPs on the culture, media and sport select committee are likely to follow two main tracks in their questioning on Tuesday of Rupert Murdoch, James Murdoch and Rebekah Brooks: did you have knowledge of illegal activity; and are you now genuinely committed to exposing it? For the MPs, the task is not simply to ask questions, but to confront the witnesses with the evidence which is already available. Here are some possible questions.

Rupert Murdoch

In the apology you published in national newspapers on Friday, you said that you regretted not "sorting things out" faster. But you don't say why it took you so long. Are you saying that you didn't know that:

• In September 2002 the Guardian published a detailed 3,000-word story describing how the News of the World and other papers had been buying confidential information from a network of corrupt police officers run by a private investigator called Jonathan Rees.

• In March 2003, Rebekah Brooks, who had just spent three years editing the News of the World, told the culture committee that "we have paid the police for information in the past".

• In April 2005, the News of the World was identified in open court as a prime customer of the private investigator Steve Whittamore, when he pleaded guilty to paying a civilian police worker to illegally obtain confidential information from the police national computer.

• In December 2006, the Information Commissioner's Office (ICO) published What Price Privacy Now? in which it revealed that 23 journalists from the News of the World had been among the "customers driving the illegal trade in confidential personal information" by paying the network of "blaggers" run by Whittamore.

• In January 2007, at the trial of the NoW's royal correspondent, Clive Goodman, and the paper's full-time private investigator, Glenn Mulcaire, counsel for the crown said explicitly that in hacking the voicemail of five non-royal victims who were named in court, Mulcaire's purpose was not to give the information to the royal correspondent but "to pass it on to the News of the World".

• During the same trial, that counsel for Mulcaire confirmed that "this information would have been passed on not to Mr Goodman – I stress the point – but to the same organisation. Any material would have gone to them."

• And, during the same trial, the prosecution disclosed that Mulcaire was not the only private investigator on the payroll of the News of the World and that the paper was paying other "research companies" even more than they were paying Mulcaire.

Did none of this alert you to the possibility that something might be wrong? Did you at any stage ask any questions about any of these public disclosures?

When the Guardian disclosed in July 2009 that News Group had paid more than £1m to settle legal actions brought by Gordon Taylor and two associates, you told Bloomberg News that the payments had not been made: "If that had happened, I would know about it."

Was that correct? If not, why did you say it? If it is correct that your son did not tell you that the company had made these payments, can you explain why he would choose to conceal that from you?

James Murdoch

In your statement of 7 July this year, you said: "The paper made statements to parliament without being in full possession of the facts." But isn't it also that the paper was in possession of some very significant facts which it failed to disclose to parliament?

For example, on 20 June this year, the company passed to police a collection of emails written by NoW journalists. The former director of public prosecutions, Lord Macdonald, has examined them and concluded that they contain evidence of indirect hacking of voicemail, breaches of national security and serious crime. Some of those messages were written by Goodman and Coulson, both of whom left the paper in January 2007.

Do you accept that in March 2007, when the then executive chairman of News International, Les Hinton, gave evidence to the culture committee, the company was certainly in possession of those messages and failed to mention anything at all about them? Can you explain why he failed to mention them? Could that failure reasonably be described as a "cover-up"?

Also in your statement of 7 July this year, you said: "The company paid out-of-court settlements approved by me. I now know that I did not have a complete picture when I did so. This was wrong and is a matter of serious regret."

We know that you paid out-of-court settlements in the cases of Taylor and Max Clifford. Were there other settlements which you approved before News Group publicly admitted liability in April this year?

You say you "did not have a complete picture". Do you agree that in the case of Taylor, the judge had ordered that your company be shown various items of evidence, which led you to settle the case, including:

• Invoices submitted by Glenn Mulcaire to the NoW, which identified various public figures as his targets, including Tessa Jowell and John Prescott.

• An email from a NoW reporter sending transcripts of 35 intercepted voicemail messages to Mulcaire for the attention of the NoW's chief reporter, Neville Thurlbeck.

• Detailed records kept by Steve Whittamore of his dealings with the NoW, which identified 23 of the paper's journalists by name – that is more than half of those working for news and features – commissioning several hundred potentially illegal searches relating to named targets.

It was this evidence which persuaded your company to settle the case. Was this not enough of a picture to show you clearly that your claims that Goodman had acted as a "rogue reporter" were clearly untrue; that other identifiable reporters were involved in handling illegally intercepted voicemail; and that other identifiable reporters were involved in handling illegally obtained confidential data?

Why did you not make any attempt to go back to parliament, to the Press Complaints Commission and the public to warn them that your company's previous statements were clearly false? Note that it is no excuse to say that your settlement with Taylor was confidential. That would not have prevented you revealing that you now had unspecified evidence which proved that the "rogue reporter" story was untrue.

Doesn't this pattern of behaviour look like a cover-up?

The civil actions

Why is your company paying for Mulcaire to appeal against a court ruling that he should answer questions about the hacking he did for the NoW?

Why is your company spending millions of pounds settling the civil actions being brought by public figures before evidence can be used in open court? Why not allow the facts to be disclosed in the public domain before settling?

Rebekah Brooks

When you were editor of the News of the World, were you aware that more than half of your news and feature reporters were paying Whittamore to use his network of blaggers to obtain confidential information?

Were you aware that your news editor, your features editor and your Scottish news editor were among those using this network? Do you remember using him yourself? The paperwork seized from his office by the ICO records you asking him to "convert" a mobile phone number into an owner's name and address.

Were you aware that Whittamore was submitting invoices to the NoW which explicitly requested payment for apparently illegal acts?

When you were editor of the NoW were you aware that your news editor, Greg Miskiw, was authorised to give a full-time contract of employment to Mulcaire?

When you were editor of the NoW, what did you do when you were told by three senior officials at Scotland Yard that one of your executives, Alex Marunchak, had used the paper's resources on behalf of two murder suspects to spy on the senior detective investigating their alleged crime?

The Guardian has disclosed that the surveillance of Det Supt Dave Cook involved the NoW in physically following him and his young children, "blagging" his personal details from confidential police databases, attempting to access his voicemail and that of his wife, and possibly sending a Trojan horse email to steal information from his computer. Did any of this come as a surprise to you, or were you told this by the police while you were editor?

When you were editor of the NoW, you published a story which referred to a message left by a recruitment agency on the voicemail of Milly Dowler, the 13-year-old schoolgirl, who was then missing without explanation. Did you read that story? Did it occur to you to question how your reporter could have known about this message?

Surrey police, who were investigating Milly Dowler's disappearance, were provided with information about that voicemail by the NoW. Was that done without your authority? Are you confident that Surrey police have no record of your being involved in the decision to tell them about that voicemail?

When you were editor of the Sun, you published confidential medical information about the illness being suffered by Gordon Brown's infant son. Did the Sun obtain that information directly or indirectly from a health worker? Did the Sun pay a health worker or anybody related to a health worker for that information or for a story related to that information?

Phone hackingRupert MurdochJames MurdochRebekah BrooksNews of the WorldNews CorporationNews InternationalGlenn MulcaireNational newspapersNewspapersMedia businessHouse of CommonsNick Davies
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