James Murdoch’s evidence challenged

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Media captionTom Watson MP questions James Murdoch about whether he was aware of the email

There has been a potentially important development in respect of who knew what and when about the full extent of hacking and wrongdoing at the News of the World.

Read this statement issued tonight on behalf of Colin Myler, former editor of the News of the World, and Tom Crone, former legal manager of the News of the World:

"Just by way of clarification relating to Tuesday's Culture Media and Sport Select Committee hearing, we would like to point out that James Murdoch's recollection of what he was told when agreeing to settle the Gordon Taylor litigation was mistaken. In fact, we did inform him of the 'for Neville' email which had been produced to us by Gordon Taylor's lawyers."

Before I go on, I should point out that News Corp has responded as follows: "James Murdoch stands by his testimony to the select committee".

So what is this "he said, she said" dispute all about?

Well, the 'for Neville' email was an email handed by the police to the lawyers of Gordon Taylor, the chief executive of the PFA, the footballers' union, who was suing the News of the World for invading his privacy by hacking into his mobile telephone.

The email implied the News of the World's chief reporter, Neville Thurlbeck, was implicated in malpractices at the News of the World. It therefore suggested that News International's official position at the time, to the effect that hacking was confined to the activities of one reporter, Clive Goodman - the former News of the World royal editor, jailed for hacking in 2007 - may not have been true.

James Murdoch has said he reached an out of court settlement with Mr Taylor, estimated to have been worth more than £600,000 to Mr Taylor including his legal expenses, without knowledge that hacking and wrongdoing at the News of the World may have gone wider than Mr Goodman's activities.

In a statement issued on July 7, he said he "did not have a complete picture" when authorising the Gordon Taylor settlement. He added: "this was wrong and a matter of serious regret".

On Tuesday, in giving evidence to the select committee, Mr Murdoch went further: he said that the "for Neville" email had been concealed from him by Mr Crone and Mr Myler, when he authorised the settlement with Mr Taylor.

So it is significant that tonight Mr Crone and Mr Myler are saying that they did inform him of the "for Neville" email.

UPDATE: 20:12

John Whittingdale, chairman of the Culture, Media and Sport Select Committee, told me he would expect James Murdoch to submit in writing to the committee why he disputes the claim of Mr Myler and Mr Crone that he was made aware of the "for Neville" email.

"He is writing to the committee to clarify other matters, and I would now expect him to write to us to give us the detail on why he said what he said about the 'for Neville' email," Mr Whittingdale told me.

UPDATE: 20:32

There has been a dismissal of a Sun journalist tonight in relation to investigations into hacking etc by News Corp. Will give you more soon

UPDATE: 20:33

If anybody cares, News Corp has changed its statement from third person to first person. So it now reads as from James Murdoch: "I stand by my testimony to the select committee"

UPDATE: 21:08

News Corp confirm that the dismissed employee is Sun Features Editor Matt Nixson. See statement below:

"News Corporation's Management and Standards Committee can confirm that News International today (Thursday, July 21) terminated the contract of a member of staff in relation to his previous work at the News of the World. 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 enquiries where appropriate."