Labour deputy leader Harriet Harman has questioned David Cameron's judgement after his communications director Andy Coulson was interviewed by police.
Mr Coulson, an ex-editor of the News of the World, voluntarily met police to discuss his alleged knowledge of phone-hacking at the paper.
Ms Harman said it was time Mr Cameron 'took the matter seriously'.
Mr Coulson denies knowing anything about hacking, which led to one of the paper's journalists being jailed.
Reports in the New York Times in September claimed the activities had been more extensive than had been previously admitted.
Downing Street has insisted that Mr Cameron retains full confidence in Mr Coulson.
A spokesman said: "Andy Coulson voluntarily attended a meeting with Metropolitan Police officers yesterday morning at a solicitor's office in London. Mr Coulson - who first offered to meet the police two months ago - was interviewed as a witness and was not cautioned or arrested."
In 2007, the paper's royal editor Clive Goodman was jailed for four months for conspiracy to access phone messages which had been left for royal aides. A private investigator, Glenn Mulcaire, was jailed for six months on the charge.
BBC political correspondent Robin Brant says the latest developments may fuel debate over Mr Coulson's future.
In the spotlight
He told the BBC's News channel: "The allegations will not go away. There are some within the Conservative party who will feel uncomfortable about this.
"The spotlight... continues to be on Andy Coulson. He in a way is becoming the story - and that's dangerous.
"There are some who believe this is a politically-motivated witchhunt. But there are many - and these tend to be political opponents - who believe the case is mounting for David Cameron to seriously consider Andy Coulson's future."
Ms Harman said: "The continued presence of Andy Coulson as director of communications at Number 10 when question marks hang over him casts doubt over David Cameron's judgement.
"It is time he took this matter seriously."
Chris Bryant, a Labour MP who believes he was one of the victims of the hacking, is seeking a judicial review to force public disclosure of the names of the 3,000 or so people whose telephone messages were allegedly intercepted by the News of the World.
Others said to be taking part in the legal action include the former deputy prime minister John Prescott and the actress Sienna Miller.
The Commons Home Affairs Select Committee is conducting an inquiry into phone-hacking and the police response to allegations.
Scotland Yard said in a statement: "We do not discuss persons interviewed as potential witnesses."