Rebekah Brooks said yesterday that she was a friend of the Prime Minister but denied that she had influenced his appointment of Andy Coulson as his party's director of communications.
"The truth is that he is a neighbour and a friend but I deem the relationship to be wholly appropriate," she said.
The newly resigned chief executive of News International denied press reports that she had gone riding with David Cameron or spoken to him about the appointment of Mr Coulson – or that NI had augmented Mr Coulson's salary while he worked at Conservative central office.
Asked whether she had ever spoken to Mr Cameron about Mr Coulson prior to his appointment, Ms Brooks replied: "That is not true. Never was true."
Appearing before the Commons Culture, Media and Sport Committee's investigation into phone hacking, the former tabloid editor said that the News of the World had repeatedly assured her that allegations the newspaper used the practice were untrue.
"They consistently denied any of these allegations in various internal investigations," she said.
"It was only when we saw the Sienna Miller documentation that we realised the severity of the situation."
When asked whether she had been lied to by senior employees, she declined to answer because of the criminal investigation. The former editor of the News of the World and The Sun said: "Unfortunately, because of the criminal procedure, I'm not sure that it's possible to infer guilt until those criminal procedures have taken place."
She agreed that the NOTW used private detectives. She said: "The use of private detectives in the late Nineties and 2000 was the practice of Fleet Street and after Operation Motorman and What Price Privacy? Fleet Street actually reviewed this practice and in the main the use of private detectives was stopped."
Pressed by Labour MP Tom Watson, she added: "I was aware that the News of the World used private detectives, as every paper in Fleet Street did. The payments... would have gone through the managing editor's office."
However, Ms Brooks denied she had met ever Glenn Mulcaire, the private detective exclusively contracted to the NOTW, who was jailed in 2007 for hacking into the Royal household.
"I didn't know particularly that Glenn Mulcaire was one of the detectives that was used by the News of the World," she said.
"In fact, I first heard Glenn Mulcaire's name in 2006."
Asked about her links with private investigator Jonathan Rees, a convicted criminal, she replied: "He wasn't a name familiar with me, I am told that he rejoined the News of the World in 2005, 2006, and he worked for the News of the World and many other newspapers in the late 1990s."
Asked whether she found it "peculiar" that Rees had been rehired after serving a sentence for a very serious offence, she replied: "It does seem extraordinary."
She struggled to name other private detectives who had worked with the News of the World. "It isn't that I can't remember, it's that you have the same information that I have, which is from Operation Motorman," she said.
Asked whether she had any regrets, she said: "Of course I have regrets.
"The idea that Milly Dowler's phone was accessed by someone being paid by the News of the World, or even worse authorised by someone at the News of the World, is as abhorrent to me as it is to everyone in this room.
"And it is an ultimate regret that the speed in which we have tried to find out the bottom of these investigations has been too slow."
Referring to her comments in 2003 that payments had been made to the police, she said: "I can say that I have never paid a policeman myself. I have never sanctioned, knowingly sanctioned, a payment to a police officer," she told the cross-party committee.
"In my experience of dealing with the police, the information they give to newspapers comes free of charge."
She admitted that "things went badly wrong" at the News of the World, but added that News International was a responsible news group. "You will have seen that, out of all the media groups in this country, News International has been the one to openly welcome the Prime Minister's public inquiry into, I think, all Fleet Street practices."
Asked whether she had any regrets over headlines now she had experienced the media "spotlight" herself, she said there had been "mistakes".
She added: "And yes, it hasn't been particularly pleasant. It was one of the main reasons that I wanted to leave because I felt I was detracting from the amazing journalists and media executives and all the people that work in News International. I felt I was detracting from their incredibly good work."