Lies, damned lies and News International

Emails show that company knew three years ago of widespread culture of hacking among senior journalists

Secret internal documents kept by News International reveal that executives knew three years ago that there was "overwhelming" evidence of senior journalists' involvement in phone hacking. A cache of new documents – company legal letters, briefing papers, and notes from telephone conversations – shows the private thoughts of the controlling core of executives.

They provide devastating evidence of their fear of the fallout from hacking, and the efforts they made to keep any evidence away from public examination. Even as the company publicly denied that voicemail interception had spread beyond a single "rogue reporter", the company's senior legal advisers were warning in 2008 of the weight of evidence showing that their long-standing defence against hacking was "fatally" damaged and their situation was commercially "perilous".

The documents heap pressure on the already embattled News Corp European chairman, James Murdoch, who had been the presumed heir to his father's global media empire. With his credibility now on the line, Mr Murdoch will be questioned by MPs next Thursday about how his account of the phone-hacking scandal differs to those given by his key lieutenants and lawyers – specifically about when, and how much, he knew about the internal hacking culture at the News of the World.

Internal documents, obtained by the House of Commons Media Select Committee investigating phone hacking at the NOTW, appear to back up earlier claims made by News International's former legal manager, Tom Crone, and the former NOTW editor Colin Myler that a meeting the two had with Mr Murdoch on 10 June 2008 was merely an update.

After his Commons testimony in July this year, Mr Murdoch wrote to the culture committee stating clearly that, prior to the 10 June 2008 meeting, he did "not recall being given any briefing nor do I recall Mr Crone or Mr Myler referring to, or showing me... documents during the meeting." However, revealed for the first time is a trail of internal emails and legal advice that led up to the 10 June meeting.

Julian Pike, from the solicitors Farrer & Co, which then had NI as their client, was copied into a memo written by Mr Crone to Mr Myler on 24 May. Marked "strictly private and confidential", it was supposed to help Mr Myler explain the full knowledge of phone hacking inside the NOTW to Mr Murdoch and offer reasons why he needed to approve an expensive damages claim from the football union boss, Gordon Taylor. A settlement of £725,000 was eventually reached.

Mr Crone's language in the memo is a startlingly frank admission of the illegal activities inside the Murdoch tabloid – and is at odds with NI's repeated assurances over the last three years that it had uncovered no evidence of hacking beyond the case of the jailed royal reporter, Clive Goodman.

Referring to a document NI had recently seen in 2008 from the Information Commissioner detailing illegal news-gathering techniques across Fleet Street, Mr Crone confirms that "infringements" and "turning round" of mobile phone numbers had taken place. He identifies those responsible as "names that are still with us and some of them have moved to prominent positions on NOTW and The Sun". He says a particular email from inside the NOTW is "fatal to our case" and NI's position is "very perilous".

Mr Pike's notes from a telephone call with Mr Myler made the day after his meeting with Mr Murdoch were also published. It specifically states he "spoke to Mr Murdoch". The words "didn't believe culture in the newsroom" suggests the News Corp boss rejected what he was told.

Internal investigations into three NOTW journalists are also listed. NI has previously said independent examination of the company's journalistic practices revealed nothing illegal. There is also mention of "James" [Murdoch] potentially advising that the "cancer" should be "cut out".

Also published was a substantial piece of opinion written by NI's legal leading counsel, Michael Silverleaf QC. Given to Mr Crone a week before his meeting on 10 June with James Murdoch, Mr Silverleaf makes no attempt at masking the legal problem hacking represented in 2008, how expensive any deal with Mr Taylor was likely to be and how there was "overwhelming evidence" that hacking went beyond the official account of a single rogue reporter.

Mr Silverleaf describes a "culture of illegal information access used at NGN [News Group Newspapers] in order to produce stories for publication". He says, given the facts he possesses, "NGN must be vicariously liable for the conducts of its employees unless they were acting on a frolic of their own". He further states that, if the Taylor case is "paraded at a public trial", this will be "extremely damaging to NGN's reputation".

Last night a News Corp spokeswoman said: "James Murdoch has been clear and consistent in his testimony. He is appearing in front of the Select Committee on 10 November and will be happy to answer any further questions then".