Mail on Sunday paid private investigator after his arrest

Editor tells the Leveson Inquiry paper paid Steve Whittamore 'substantial sum of money'

The Mail on Sunday continued to pay for the potentially illegal services of a private investigator after he was arrested and charged with illegally trading in people's personal information.

The editor of the Associated Newspapers title, Peter Wright, admitted to the Leveson Inquiry yesterday that the paper had continued to commission searches by Steve Whittamore long after the Operation Motorman police investigation resulted in his arrest in March 2003.

Mr Wright told the inquiry that his newspaper was using the services of Mr Whittamore's agency until September 2004. He had been charged in February of that year and was later given a conditional discharge when the Motorman case came to court in 2005.

The Mail on Sunday editor claimed that "a substantial sum on money" had been paid to Mr Whittamore during the years he worked for the Mail titles. He estimated the total payment to be around £20,000.

However, Mr Wright said that after Mr Whittamore was charged, the paper had used him only rarely and only when it was sure he would be acting legitimately. The inquiry was told:

* The top payment the paper made for a major interview in the past year was £50,000;

* A similar sum was paid to the former mistress of Lord Triesman, who revealed his allegations of bribes paid to football World Cup referees;

* The paper made a recent cash payment of £3,500;

* Payments had been made to public officials, mostly "people in the armed forces", for stories they wanted brought to public attention. Mr Wright said payments had not been made to police officers, to his knowledge.

It was also revealed that the Daily Mail picture desk receives 400 photographs a day of Pippa Middleton, the sister of the Duchess of Cambridge.

Mr Wright denied that journalists on his paper had concealed their use of Mr Whittamore, but admitted that when an internal audit was eventually ordered, it found that payments for Mr Whittamore's services (including for potentially illegal searches) had been classed with other "incidental expenses" such as taxi and accommodation costs.

Asked by Robert Jay QC, counsel to the inquiry, why he had not taken steps to identify the journalists who regularly used Mr Whittamore, Mr Wright said that although they had been dealing with someone acting in ways "which we were not entirely aware of" he had hoped a public interest defence would be possible.

The legal manager of Associated Newspapers, Liz Hartley, was later questioned about the Mail's response to evidence given earlier in the inquiry by the actor Hugh Grant.

Following his appearance before Lord Justice Leveson, the Daily Mail published a statement which read: "Mr Grant's allegations are mendacious smears driven by his hatred of the media." The draft statement, she said, included the input of Paul Dacre, the paper's editor.

David Sherborne, counsel for Mr Grant and other victims of press wrongdoing, said he expected Mr Dacre to address the issue when he gives evidence to the inquiry in February.

Mail exclusives: Public figures in the firing line

Lord Mandelson The Mail on Sunday revealed that the former cabinet minister and European commissioner had bought an £8m house. How could he afford such a palace? the paper asked. Lord Mandelson threatened to register a complaint with the PCC but the action was not pursued.

Lord Triesman Melissa Jacobs, mistress of the former Football Association chairman, revealed to the Mail on Sunday that she had secretly taped Lord Triesman talking about Spain and Russia colluding to bribe Fifa referees.

Pippa Middleton Since her sister Kate's wedding to Prince William, Ms Middleton has been a serial target for the paparazzi. The Mail's picture editor said he was offered 400 pictures a day of her not doing very much.

Bob Crowe During a transport strike, the MoS revealed that Mr Crowe, the rail union boss, had been using a borrowed scooter. Police later learned that Steve Whittamore's agency supplied the name of the vehicle's owner.

Hugh Grant The actor told the inquiry in its opening week that he believed The Mail had hacked his phone to obtain stories. The Mail responded saying it was a "mendacious smear" by someone who hated the media. The issue is still unresolved.