Lawyers are preparing to use a series of test cases involving politicians and celebrities to challenge Scotland Yard's handling of the phone-hacking scandal and pave the way to multiple six-figure compensation claims against the News of the World.
Four public figures, including the actress Sienna Miller and the former Yard deputy assistant commissioner Brian Paddick, have begun proceedings for a judicial review of the police's conduct of the case after it emerged that officers failed to contact all of the 4,332 individuals listed by Glenn Mulcaire, the private investigator employed by the NOTW, who was jailed for illegally accessing voicemails. The former deputy prime minister Lord Prescott will decide this week whether to join the legal action.
If the High Court rules that the Metropolitan Police broke human rights rules by keeping secret the potential targets drawn up by Mulcaire the full list of names will have to be disclosed. This will open the floodgates for a slew of breach of privacy claims against News International with a potential cost of tens of millions of pounds.
The Yard refuses to say just how many "potential victims" have been contacted, but it is understood that the vast majority of names on Mulcaire's databases remain secret.
It is expected that the first claims against the Sunday paper would come from the 91 people, including Miller, whose voicemail PIN codes were in the possession of Mulcaire, who worked with the NOTW's royal correspondent, Clive Goodman, to hack the phones of Princes William and Harry while the current Downing Street press chief, Andy Coulson, was editor of the paper.
One lawyer with an intimate knowledge of the proceedings said: "This has the potential to crack open the whole matter. The police gave an undertaking to prosecutors that they would contact the victims, and subsequently failed to do so. If the test cases establish that this information should have been provided to this small number of individuals, then it follows that everyone else on Mulcaire's list should have been informed. If those names are revealed, then each one will have a strong basis for bringing a breach of privacy case against News International."
The NOTW is known to have already settled two privacy claims, brought by the publicist Max Clifford, who received £1m compensation, and Gordon Taylor, the chief executive of the Professional Footballers' Association, who was paid £700,000 in damages and legal costs. George Galloway, the former MP, is claiming about £300,000 in damages from the Sunday paper in ongoing High Court proceedings.
Legal experts believe that the high legal costs will make it difficult for News International to defend privacy claims against it. Although recent cases, such as the £60,000 awarded to the Formula One boss Max Mosley against the NOTW in 2008, have resulted in relatively small payouts, lawyers argue that the "aggravating factors" of hacking mobile phones will significantly increase the damages.
Meanwhile, the Mayor of London, Boris Johnson, joined those questioning the need for the renewed Yard investigation into whether knowledge of phone-hacking at the NOTW went beyond Goodman. Mr Johnson, who was told in 2006 that his phone may have been accessed, described new concerns that senior executives at the paper were aware of the hacking as "codswallop".
Accusing Labour politicians of a "politically motivated put-up job", he said the party was resurrecting the scandal "simply in order to score party political points against the Prime Minister's press spokesman".