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Newspapers owned by media mogul Rupert Murdoch have been accused of secretly paying over £1m to settle three cases involving the alleged use of illegal phone tapping against celebrities.

News Group reporters allegedly hired unscrupulous private investigators to gain access to mobile messages, as well as bank statements and tax returns. The settled cases provide evidence that former News of the World royal editor, Clive Goodman, jailed for hacking into the voicemail messages of royal aides in January 2007, was caught using an unscrupulous practice in much wider use among tabloid reporters in Wapping.

The Guardian, which broke the story, quotes unnamed Met police detectives who said that during the Goodman inquiry, officers found evidence that News Group reporters used PIs to hack into "thousands" of mobile phones. The paper also claimed court documents showed that reporters for the Murdoch papers had used private investigators to obtain personal information on public figures from government agencies, financial institutions and other organisations.

Gordon Taylor, head of the Professional Footballers Association, sued the News of the World over allegations that he was targeted in an illegal wiretapping operation, and received £700K in damages and legal costs in exchange for dropping the case and agreeing to comply with a gagging order, according to The Guardian. Other targets of the celebrity muck-raking operation included model Elle MacPherson, former deputy prime minister John Prescott and celebrity PR Max Clifford, The Guardian reports.

Glenn Mulcaire, a private investigator convicted of bugging mobile phones and jailed alongside Goodman in January 2007, admitted hacking into the phones of Taylor, Clifford and MacPherson as well as Lib Dem MP Simon Hughes and football agent Sky Andrew.

Allegations of widespread criminal breaches of the UK's wiretapping laws raise awkward questions for Andy Coulson, who resigned as News of the World editor over the Goodman case, before landing a job as head of communications for the Conservatives. Coulson denies any impropriety.

"This story relates to an alleged payment made after I left the News of the World two and half years ago," he said in a statement. "I have no knowledge whatsoever of any settlement with Gordon Taylor."

The House of Commons' culture committee were given assurances that Goodman had acted alone and without the knowledge of other journalists in paying to tap into the voicemail messages of royal aides, reassurances that the latest revelations put into serious doubt. John Whittingdale, chair of the Commons committee, has promised to raise the issue with his colleagues in a move that may lead to a further (more detailed) inquiry.

The Guardian said News Group may well have acted in good faith but still faces tough questions. The paper also raises questions about why the police failed to notify targets of alleged wiretapping about alleged breaches to their privacy, and why the Press Complaints Commission failed to uncover evidence of wrongdoing during an inquiry.

Metropolitan Police assistant commissioner John Yates told Sky News that it would "establish the facts" about claims over mobile phone hacking by News of the World staff.

Nobody from New International was available for immediate comment at the time of going to press but we'll update this story as and when we hear more. ®

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