Glenn Mulcaire received a payment from newspaper after phone-hacking conviction, editor admits

News of the World executives admitted today that the private investigator Glenn Mulcaire was given a payment by the company after his conviction for phone hacking, as MPs cast doubt on elements of their testimony.

During a parliamentary hearing lasting almost three and a half hours, MPs heard evidence from four senior company figures including former News of the World editor Andy Coulson, now David Cameron’s director of communications.

It also emerged that:

• Scotland Yard never asked Coulson and former News of the World managing editor Stuart Kuttner to help with their investigation into former royal correspondent Clive Goodman, who was also jailed for phone hacking.

• News International confirmed the Guardian’s revelation that it had paid to settle a claim over phone hacking from Gordon Taylor, the chief executive of the Professional Footballers’ Association.

• News International’s executive chairman, James Murdoch, was aware of the decision to pay £700,000 to settle Taylor’s case.

• Coulson was recently told by police that his phone may also have been hacked.

• One MP questioned Coulson’s credentials for becoming an adviser to a future Tory government because phones belonging to staff in the royal household were hacked during his editorship of the News of the World.

• The judge who presided over Goodman and Mulcaire’s trial said the private investigator had “dealt with others at News International”.

The Plaid Cymru MP Adam Price cast doubt on the account given by News International executives of an email sent by a junior reporter to Mulcaire, containing a transcript of a series of hacked phone messages, that referred to the News of the World’s chief reporter, Neville Thurlbeck.

Crone told MPs that the reporter could not remember the email, while Myler said Thurlbeck had no recollection of receiving it and there was no IT evidence to suggest that he did.

Price said the email was a “smoking gun”. “The sender of the email does not remember sending it, the recipient does not remember receiving it: it’s completely implausible,” he added.

News International executives twice attempted to get MPs thrown out of today’s hearing of the Commons culture, media and sport select committee.

They claimed Labour MP Tom Watson should not be there because he was involved in legal action against the Sun, while Kuttner accused Philip Davies MP of prejudging him after raising questions about the timing of his recent resignation. The Committee’s chairman, John Whittingdale MP, rejected the complaints.

During the hearing, it emerged that Mulcaire was paid following his conviction in January 2007 for hacking into voicemail messages.

MPs were also told that an “arrangement” was made with Goodman after his conviction and that News International would make more internal inquiries about the details.

Tom Crone, the legal manager for News Group, the News International subsidiary that publishes the News of the World, said Mulcaire had earned rights as a contracted employee with a annual deal with the worth more than £100,000.

“Mr Mulcaire raised legal issues over his status … if someone has worked for you for x hours a week he has certain employment rights. Given these employment rights, there’s a process that has to be followed when that relationship comes to an end. I believe as a result of failures in the process, there was a sum of money paid to him,” Crone added.

He said this “bore no relation” to a figure of £200,000 suggested by Davies.

Davies also asked whether Mulcaire had been paid to keep quiet. Crone replied: “Absolutely not.”

Later, Paul Farrelly MP brought up the matter again, questioning why Mulcaire had been paid.

“Mr Mulcaire was convicted on six counts, a convicted criminal, who breached the press code of conduct all over the place, yet at the end of it he still has claims against the company in terms of employment rights?” Farrelly said.

Crone responded that Mulcaire apparently did have such rights. “If you don’t get the process right, you have to pay them,” he said.

Colin Myler, the News of the World editor brought in when Coulson resigned over the phone-hacking affair, who also gave evidence to the committee today, added: “In all seriousness, HR laws on employment are incredibly complicated. I think it allows people to do rather extraordinary things and still come back on an employers and say you still have not got a right to fire me.”

Asked whether there had been any payment to Goodman, Crone and Myler both said they were not aware of such an award.

Kuttner, who has stepped down as NoW managing editor this month, was also asked if Goodman had been paid since his conviction. “As far as I know, arrangements or agreements were made with them [Goodman and Mulcaire],” he added. “I have no details at all of the substance of those agreements.”

Asked by Davies who then would know, he said he would make inquiries, adding: “It’s quite a large company.”

Myler reeled off a list of the activities Mulcaire, a former AFC Wimbledon footballer, undertook for the News of the World, which included checking Land Registry records, directorships and court records.

“He gave advice on crime issues, had vast professional football knowledge, he was involved in all aspects of the game,” Myler said. “He came up with story ideas, tips, some that worked out, some that did not. He had a vast database of contact numbers in the sports industry and the showbiz world.”

MPs also heard that the police investigation that led to Goodman and Mulcaire’s convictions did not call on Coulson or Kuttner.

“I was never interviewed, never asked to give any form of evidence,” Coulson told the hearing.

Farrelly asked Coulson whether he found that strange. “It’s a question for the police,” Coulson replied. “I think I’m right in saying the police have made clear, the Guardian have made clear, the PCC have made clear, that there’s no evidence of my direct involvement in any of this.”

Kuttner also said he had not been asked to help the police.

Farrelly asked Coulson how he would be able to have a relationship with Palace spokesmen if he became an adviser in a Cameron government.

Coulson said he had met Palace spokesman Paddy Harverson socially and apologised to the royal family. “There’s no problem my end,” he added.

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