News International found 'smoking gun' e-mails in 2007

News International found e-mails in 2007 that appeared to indicate that payments were being made to the police for information, although this evidence of alleged criminal behaviour was not handed to the Metropolitan Police for investigation until 20 June of this year.

According to sources, these e-mails were in the possession of the firm of solicitors, Harbottle & Lewis.

They were retrieved from Harbottle & Lewis by lawyers acting for News Interernational and for William Lewis - general manager of News International - who is in charge of News International's clean-up of what went wrong at the News of the World (and who was recruited by News International last July).

The e-mails appear to show Andy Coulson, editor of the News of the World from 2003-2007, authorising payments to the police for help with stories.

They also appear to show that phone hacking went wider than the activities of a single rogue reporter, which was the News of the World's claim at the time.

Mr Coulson, who subsequently became David Cameron's director of communications in 10 Downing Street, was arrested and bailed last week.

In a letter presented to the Commons Culture, Media and Sport select committee, Harbottle & Lewis confirmed that it had been asked by News International to review whether the illegal actions of Clive Goodman - the News of the World's former royal editor, jailed in 2007 for phone hacking - were known to his News of the World colleagues.

In this letter, dated 29 May 2007, and sent to Jon Chapman of News International, Lawrence Abramson of Harbottle & Lewis wrote that it had "reviewed e-mails to which you have provided access from the accounts of Andy Coulson, Stuart Kuttner, Ian Edmondson, Clive Goodman, Neil Wallis, Jules Stenson".

Mr Abramson confirmed to Mr Chapman that it "did not find anything in those e-mails which appeared to us to be reasonable evidence that Clive Goodman's illegal actions were known about and supported by both or either of Andy Coulson, the editor, and Neil Wallis, the deputy editor, and/or that Ian Edmondson, the news editor, and others were carrying out similar illegal procedures".

The letter from Mr Abramson to Mr Chapman makes no mention of whether the e-mails contain evidence of wrongdoing by journalists other than Mr Goodman.

However, when William Lewis and his fellow News International executives re-acquired those e-mails from Harbottle & Lewis, they found what they perceived to be prima facie evidence that the illegal phone hacking went wider than just the activities of Mr Goodman and that there were potentially illegal payments to the police.

William Lewis went looking for these e-mails after the Metropolitan Police of Operation Weeting, who are investigating alleged phone hacking, enquired about the existence of 2,500 e-mails that Colin Myler - who replaced Andy Coulson as editor of the News of the World - mentioned to MPs on the Culture, Media and Sport committee.

Mr Myler told the MPs these e-mails had been trawled through as part of his own inquiry into whether hacking was carried out by others than Mr Goodman.

In response to a question by the MP Philip Davies about whether Mr Goodman was working alone, Mr Myler said: "I conducted this inquiry with Daniel Cloke, our director of human resources. Over 2,500 e-mails were accessed because we were exploring whether or not there was any other evidence to suggest essentially what you are hinting at. No evidence was found; that is up to 2,500 e-mails".

William Lewis and his News International colleagues on a newly created management and standards committee have not found the full 2,500 e-mails mentioned by Mr Myler, just the sub-set of 300 that were passed to Harbottle & Lewis.

The disclosure that News International found 300 e-mails as long ago as 2007, that indicated wider malpractices at the News of the World than those which led to the jailing of Mr Goodman and of the private detective Glenn Mulcaire, will pose very difficult questions for News International's chairman, James Murdoch, son of Rupert Murdoch.

In December 2007, James Murdoch took charge of News International as chief executive of the European and Asian operations of its parent company, News Corporation.

Some four months later, in April 2008, he authorised the payment of a substantial out-of-court settlement, running to hundreds of thousands of pounds, with Gordon Taylor, chief executive of the Professional Footballers' Association, over the hacking of Mr Taylor's phone.

That settlement - which was agreed by Mr Murdoch and signed by News International's chief operating officer at the time, Clive Milner - contained a gagging clause, making it impossible for either party to talk about the settlement or what led to it (though many of its details were subsequently revealed by the Guardian).

Mr Murdoch has now conceded that it was wrong of him to agree to the settlement with Mr Taylor and also to other out-of-court settlements made at a similar time.

He said on Thursday: "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."

There have been allegations that Mr Murdoch, in settling with Mr Taylor, was endeavouring to put a lid on the furore to deter a wider police investigation of the News of the World's behaviour.

News International denies this.

It insists that Mr Murdoch only approved the Taylor settlement and gagging clause because he was ignorant of the alleged transgressions by other News of the World journalists.

In particular, News International says Mr Murdoch had no knowledge of the 300 e-mails that Harbottle & Lewis were asked to review.