Senior lawyers at royal solicitors Harbottle & Lewis are "furious" at the way they have been blamed by Rupert Murdoch and others in the wake of the phone-hacking scandal, The Independent on Sunday has learned. They will meet the Metropolitan Police to explain their position "in the next few days".
Rupert Murdoch, the chairman of News Corporation, said the prominent London law firm had made a "massive mistake" when it gave the publishers of the News of the World a clean bill of health as to whether there was more illegality to be uncovered at the company at that time.
It is believed that Mr Murdoch also criticised the lawyers in a private meeting with Milly Dowler's family earlier this month, when he apologised for the newspaper hacking their dead daughter's mobile phone and deleting text messages, giving the family false hope that she might still be alive.
Harbottle & Lewis declared in May 2007 that there was no "reasonable evidence" that senior News International staff knew about the illegal activities of former royal reporter Clive Goodman. They had been called in by the Murdochs and asked to examine as many as 2,500 emails sent by the reporter, who was jailed in January 2007 for hacking phones belonging to aides of Prince William.
News International (NI) has used the Harbottle letter of exoneration as a shield to fend off allegations that it covered up the widespread nature of illegal activities which continued to be practised by News of the World staff.
It later emerged that the emails did contain evidence of illegal payments to the police, though seemingly not of hacking. When NI recently obtained a second opinion on the emails from Lord Macdonald, the former director of public prosecutions, he concluded within minutes that there was possible evidence of criminal activity and advised NI to call the police. James Murdoch later told MPs that they relied on the letter to "push back" against fresh allegations of hacking.
The Murdoch claims have infuriated Harbottle & Lewis so much that some senior figures at the firm are understood to have discussed taking legal action for defamation. The firm was initially barred from explaining its position because of client confidentiality, but NI later lifted this restriction. Harbottle will now speak to the police and the Commons Culture, Media and Sport Committee. A source close to the firm confirmed it "actively asked to be released from the obligations of privilege".
Yesterday, The New York Times (NYT) reported that both NI and Harbottle were clearly aware of the contents of the emails when the exculpatory letter was written. According to the paper, in one email Clive Goodman warns that those involved could "go to prison for this".
Despite this, the Harbottle letter makes no reference to payments to the police.
The letter was commissioned after a threat from Goodman to sue NI for unfair dismissal on the grounds that senior executives knew about the phone-hacking. There was, according to The NYT, citing sources familiar with the incidents, "huge anxiety" about the precise wording. NI urged the law firm to write a letter giving it a clean bill of health in the strongest possible terms. Jon Chapman, NI's head of legal affairs, reportedly rejected two earlier drafts as being insufficiently broad. One person familiar with the correspondence is reported to have said that the lawyers involved seemed to struggle to find language that said the review had found no evidence of wrongdoing.
Another Harbottle source added: "If we made any mistakes, we will hold our hands up, but we are extremely keen to protect our reputation and we will vigorously challenge any suggestion that we were in any sort of cahoots with News International."
Tomorrow, Labour leader Ed Miliband will attempt to step up pressure on the coalition about its role in the hacking scandal. Mr Miliband will send letters to David Cameron, George Osborne, Jeremy Hunt, Nick Clegg and Vince Cable asking about the Government's links to News International, the handling of the BSkyB bid and the employment of Andy Coulson.
"The signs are that David Cameron still does not get it," said Ivan Lewis, Labour's culture spokesman. "A tangled web of their own making will not go away until they and their Cabinet colleagues give full and frank answers to legitimate questions."
But Labour's hopes of further capitalising on the scandal appear hampered by the release of details of a string of meetings and social events attended by senior party figures with News International bosses.
Mr Miliband met NI editors and executives, including the former chief executive Rebekah Brooks, 12 times after the general election.
In all, Labour frontbenchers, including Douglas Alexander, Tessa Jowell and Shaun Woodward, met News International in some form 60 times since May 2010.