16 August 2011 Last updated at 13:42 ET

Article written by Robert Peston Business editor

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Phone hacking: Murdochs savaged by Harbottle

 

Goodman letter alleges hacking 'widely discussed' at NoW

Harbottle & Lewis, the media law firm, has launched a withering attack on News International and the Murdochs in written evidence it has given to the Culture, Media and Sport Select Committee.

News International and the Murdochs have said they relied on the advice of Harbottle & Lewis in their failure to investigate the full exent of alleged criminal behaviour at the News of the World till this year.

But Harbottle says that for a fee of £10,000 it provided very narrow advice in a letter on whether the News of the World's royal editor Clive Goodman, who was dismissed after being found guilty of phone hacking, could make credible allegations in an employment tribunal that phone hacking was widespread at the now closed Sunday tabloid.

Harbottle says this letter was never supposed to be published or given to the Culture, Media and Sport committee - which happened in 2009/10 - to reinforce News International's claims (of the time) that it had identified and dealt with limited examples of wrongdoing at the News of the World.

Harbottle says it had no access to witnesses and saw very few documents.

It therefore rejects the assertion by James Murdoch, the chairman of News International, that News International relied on or "rested on" Harbottle's work for his and News International's mistaken belief that Mr Goodman was a lone rogue reporter.

Update, 14:49: What is also embarrassing for the Murdochs is that Jon Chapman, the former director of legal affairs at News International, has corroborated Harbottle & Lewis's contention that its now famous letter that says it could not find evidence of widespread phone hacking at the News of the World was not based on a general inquiry or investigation into the issue of voicemail interception at the News of the World.

Mr Chapman says: "to characterise and hold it out as such now, and to refer to it on several occasions in the same context as a major police investigation and an inquiry by a regulatory body" - which is what James Murdoch did in his evidence to the Culture, Media and Sport Committee - "seems to me to be very misleading".

But for News International and its parent company, News Corporation, the most devastating evidence published today is the letter written on 2 March 2007 by Clive Goodman to Daniel Cloke, News International's human resources director, in which Mr Goodman says that "other members of staff were carrying out the same illegal procedures [as he was]", and that phone hacking was "widely discussed in the daily editorial conference until explicit reference to it was banned by the editor".

And then there is this explosive claim by Mr Goodman: "Tom Crone and the Editor promised on many occasions that I could come back to a job at the newspaper if I did not implicate the paper or any of its staff in my mitigation pleas [in the criminal trial]".

Update, 18:40: Clive Goodman was jailed in January 2007 and News International wanted to sack him for alleged gross misconduct.

So why did it pay Mr Goodman £244,000 after he left the company (in two instalments: £90,502.08 in April 2007 and £153,000 between October and December 2007, of which £13,000 was for his legal fees)?

News Corporation sources tell me Mr Goodman's pay at the time of his imprisonment was circa £90,000.