For several days, News International executives have been quietly claiming there is "worse to come" in the aftermath of the revelation that Milly Dowler's voicemails were hacked into. It may have been hard to conceive of anything more serious than monitoring messages left for a murdered schoolgirl – but that was not quite what the executives meant. "Worse" in this context can only have meant more damaging revelations about the conduct of some key company bosses.
In 2007, after Clive Goodman, the News of the World's royal editor, and Glenn Mulcaire, the newspaper's private investigator, pleaded guilty to hacking into mobile phones belonging to members of the staff of Prince William and Prince Harry, News International, the publisher of the News of the World, commissioned a mini-inquiry.
Goodman had said, in the context of the case, that he was not the only reporter who knew about hacking for the now closed Sunday title. The inquiry, understood to have been more a collection of emails than a formal report, seems to have concluded that Goodman was telling the truth.
However, that document, or collection of documents, never saw the light of day.
One source at News International told the Guardian that five people at the company saw the report, including Les Hinton, the former executive chairman who now runs the Dow Jones business for Rupert Murdoch.
The News of the World editor in 2007 was Colin Myler, who produced the newspaper's valedictory edition on Sunday. The red-top's chief lawyer, Tom Crone, was also in position then. Myler and Crone are both understood to have seen the documents.
News International gave an indication that certain individuals did not know about the documents, including Rebekah Brooks, as she was at this time the editor of the Sun, which was not implicated, and James Murdoch, for the obvious reason that he was working elsewhere as chief executive of satellite broadcaster BSkyB.
The question of who saw the documents is expected to be answered by any judicial inquiry into phone hacking at the News of the World.
Hinton, a lifelong lieutenant of Rupert Murdoch, has long been one of his most trusted advisers.
Affable, calm and discreet, Hinton has worked with Murdoch all his career, rising from a job as a junior reporter in Australia to being the man brought in to turn around News International in the early 1990s, and only leaving for the US to help his mentor integrate Dow Jones's flagship property, the Wall Street Journal.
Hinton's move to New York towards the end of the last decade took him out of the frontline of the hacking saga, but the latest revelation brings nothing less than Murdoch's right-hand man – at least when it comes to newspapers – back to centre stage.
The 2007 dossier has now been passed to Scotland Yard. In the past week, Myler's Sunday newspaper has been closed, and it has been made clear that the former editor will not be staying at News International. Insiders indicate that Crone, once its key legal counsel, has been sidelined. But Hinton remains in a key executive position, Murdoch's man in charge of the business newspaper of record in the US.
The memos – which were written in the wake of the jailing of Goodman and the newspaper's £100,000-a-year private investigator, Mulcaire – allegedly show that the pair were not the only News International employees implicated in phone hacking.
The disclosure of the memos comes four years after the then executive chairman of News International, Hinton, told MPs that the organisation believed Goodman was the sole staff offender.
'Rogue' reporter
While giving evidence to the Commons culture committee on 6 March 2007, Hinton was asked whether the News of the World had "carried out a full, rigorous internal inquiry" into phone hacking and whether he was "absolutely convinced" the practice was limited to a single reporter.
He replied: "Yes, we have, and I believe he was the only person, but that investigation, under the new editor [Colin Myler], continues."
The select committee was also told that News International had carried out an internal inquiry "of emails still on its IT systems" in May 2007.
Lawrence Abramson, managing partner of the solicitors Harbottle & Lewis, who reviewed the emails on the instructions of News International, told the committee that they had examined the evidence and concluded: "We did not find anything in those emails 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 memos – which are reported to have been recovered by Will Lewis, News International's general manager and the man given the task of investigating the phone-hacking claims – also suggest that the organisation was paying police officers for information.
According to the BBC's business editor, Robert Peston, the documents were not handed to Scotland Yard until 20 June this year and are thought to have been in the possession of Harbottle & Lewis.
Peston reported that the memos appear to show Coulson, who edited the News of the World from 2003 to 2007, "authorising payments to police" for assistance with stories.
Last week, as he announced the closure of the News of the World, James Murdoch admitted that the company had "made statements to parliament without being in full possession of the facts". That, he said, was wrong. "The News of the World and News International wrongly maintained that these issues were confined to one reporter," he said, adding that NI had given police information that would demonstrate that the practice of phone hacking was more prevalent than at first thought.
In his statement, Murdoch also said that he had been wrong to authorise out-of-court payments to those who had fallen victim to hacking. "I now know that I did not have a complete picture when I did so," he said. "That was wrong and is a matter of serious regret."
One police source told the Guardian that senior detectives investigating the phone-hacking scandal and the paying of officers see the information contained in the memos as a "potential game changer". They believe it will make it plain News International failed to tell them everything it knew – and take the pressure off them for failing to reopen the case in 2009.
Coulson, Goodman and an unnamed 63-year-old man have been arrested and questioned by detectives in recent days. All were released on police bail until October.
