The Independent understands that George Galloway, the former MP, has instructed his lawyers not to consider any out-of-court settlement in a claim for breach of privacy unless Rupert Murdoch's News Group Newspapers, owners of the News of the World, are prepared to make full disclosure of the paper's involvement in phone-hacking.
The spectacle of Mr Coulson being cross-examined on his evidence before a jury is an embarrassing prospect for David Cameron, who has repeatedly said his spin doctor deserves a "second chance" after resigning over the phone-hacking scandal in 2007.
On an awful day for the Downing Street spin machine, there was speculation that the Foreign Secretary William Hague would resign because of smears over his relationship with his aide Christopher Myers. A statement by Mr Hague, defending his marriage, was released on Mr Coulson's advice on Wednesday, just as fresh information was emerging in the phone-hacking scandal. Senior Tories said Mr Hague's statement had shown poor judgement.
In a further blow to News Group, it also emerged that a News of the World reporter, named by The Guardian last night as Dan Evans, who has been with the News of the World since 2005 and specialises is celebrity scoops, is currently "suspended from reporting duties" following a complaint by a female television personality that her voicemail was intercepted this year.
The development comes after guarantees were given to a select committee of MPs by senior Murdoch executives that "rigorous new safeguards" had been put in place in 2007 to prevent such behaviour. Mr Galloway lodged a claim for a minimum of £300,000 in damages in the High Court in July, claiming his voicemail was illegally intercepted between February 2005 and August 2006, when Coulson was editing the News of the World.
The Independent has learnt that Mr Galloway was advised by police to change his mobile telephone or to alter the security pin number on his voicemail after his name was found on a list compiled by Glenn Mulcaire, a private investigator who worked for the News of the World. Mr Galloway subsequently changed his mobile. Mulcaire was jailed in 2007 along with the News of the World royal editor Clive Goodman after the pair were convicted of hacking into the phone messages of royal aides.
Since then, two other alleged victims of the phone-hacking, the chief executive of the Professional Footballers Association Gordon Taylor and the publicist Max Clifford, have sued News Group for damages. Both claimants accepted substantial settlements before the cases came to court.
But Mr Galloway, the former Respect MP for Bethnal Green and Bow, is anxious that the case is fully aired in public. A source close to the case said: "He's not interested in the money. George doesn't want to be bought off. If he settled without disclosure there would always be the suspicion that News Group had only settled for the nuisance factor. What he wants is the truth as to the extent of the phone-hacking. With Andy Coulson now in Downing Street he feels there is an establishment cover-up."
Mr Galloway believes that more than 100 people were the target of phone-hacking by the News of the World and he hopes a court hearing will help others to come forward. The former MP was the target of a sting operation by Mazher Mahmood, the News of the World's undercover reporter, in 2006.
The politician has claimed that Mr Mahmood tried and failed to implicate him in Holocaust denial and financial irregularities. As a reprisal, Mr Galloway released an image of Mr Mahmood, who is known as the "Fake Sheikh", with News Group taking legal action to try to prevent him from doing so. At around the same time Mr Galloway was warned by police to change his mobile phone, although there is no suggestion that Mr Mahmood was linked to any phone-hacking.
News Group is due to issue its defence to the Galloway claim next week. In a statement, it said it was seeking clarification on the matter from the Metropolitan Police. "The News of the World has absolutely no knowledge or evidence that Mr Galloway's voicemail was accessed."
Other names believed to be on the list in possession of Mulcaire include Sir Ian Blair, the former Commissioner of the Met, Michael Fuller, a former senior Scotland Yard officer, and Brian Paddick, a former deputy assistant commissioner at Scotland Yard.
Joanne McCartney, a Labour member of the Metropolitan Police Authority, has written to Sir Paul Stephenson, the Met Commissioner, demanding to be told if reporters or investigators for News International ever hacked into the phones of senior officers and if this could have influenced the investigation.
Further cases against the media group are expected to be launched in weeks to come, with an action by the former England footballer Paul Gascoigne being filed by the end of next month. His lawyer, Gerald Shamash, said: "I've no doubt that Paul's phone was tapped. He's absolutely adamant about it."
On Sunday, The New York Times will publish a lengthy account of the phone-hacking scandal – already released online – alleging that Mr Coulson "talked freely" with colleagues about hacking. One former News of the World reporter Sean Hoare, who was to be dismissed amidst drug and alcohol problems, told The New York Times he had even played recordings of hacked messages to Coulson. "He actively encouraged me to do it," he claimed.
His nemesis? How justice favours George Galloway
* In 2004, George Galloway won a £150,000 libel victory over The Daily Telegraph after it alleged that the former MP received £375,000 a year from Saddam Hussein's regime – money it was alleged was diverted from the oil-for-food programme which was there to help suffering Iraqis. The story was based on documents translated into English from Arabic and found in the ruins of Baghdad by a Daily Telegraph reporter. Mr Galloway's claim was heard by Mr Justice Eady, who awarded in Mr Galloway's favour. The Telegraph eventually lost an appeal on the day that Mr Galloway was kicked out of the Big Brother house.
* The Christian Science Monitor published a story on its front page alleging that Mr Galloway had taken £6.5m from Saddam in cash and cheques, based on documents it had been passed. The documents turned out to be forgeries and the paper printed an apology. Mr Galloway rejected it and pursued a libel claim. He eventually settled out of court for an undisclosed sum.
* After Mr Galloway gave a rousing performance when called to give evidence to the US Senate, using it as an opportunity to attack American foreign policy, he was accused of giving false "or misleading" testimony under oath. Mr Galloway responded by inviting charges of perjury, claiming that the Senate had been embarrassed by his criticism. No charges were made.
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