Leading article: Coulson taints Cameron

There are some conspiracy theories that happen to be true. And just because you are paranoid does not mean that they're not listening to your voicemail. The Andy Coulson furore may look like one of those beltway politics stories, but it is not. The personal integrity of the Prime Minister's staff is important; and the story has implications for civil liberties, including the right to privacy, which is not threatened only by government.

Mr Coulson, the Prime Minister's director of communications, insists that he knew nothing about the practice of illegally "hacking" into the mobile telephones of public figures when he was editor of the News of the World. He resigned from that post in 2007, accepting responsibility for the offence committed by Clive Goodman, one of his journalists, which Mr Coulson presented as an isolated incident about which he could not have been expected to know. Mr Goodman was jailed for four months, having pleaded guilty to intercepting royal phone messages. Six months later, Mr Coulson was hired by David Cameron, who said: "I believe in giving people a second chance."

Since then, the evidence has accumulated that the practice of hacking was extensive and routine at the News of the World. As we report today, Lord Mandelson was one of dozens of politicians who have been told by the police that their names were found among the records of Glenn Mulcaire, one of the subcontractors used by the News of the World, who was jailed with Mr Goodman. Last week, The New York Times published the results of a major investigation into the affair. It added to the weight of evidence suggesting that Mr Coulson's denial to a parliamentary committee that he knew of the practice lacked credibility.

"Even the office cat knew," one anonymous News of the World journalist told the American newspaper. Previously, Andrew Neil, the former editor of The Sunday Times, another newspaper owned by Rupert Murdoch, said that Mr Coulson was either "incompetent or complicit". As Charlotte Harris discusses below, Sean Hoare, a former News of the World reporter, told The New York Times on the record that Coulson asked him to hack phones. Last week, he repeated it to the BBC: "He was well aware the practice existed. To deny it is simply a lie."

Mr Cameron now has three choices. He can stand by Mr Coulson, and wait for the cases brought by people who believe their phones to have been hacked to work their way through the courts. Mr Coulson's former employer, News International, has already settled at least two cases, which has avoided the need for full disclosure. He could move Mr Coulson to some other role. Or he could get tough and say that he does not believe in third, fourth and fifth chances.

This is important for Westminster village reasons, in that Mr Coulson is beginning to lose the credibility with journalists that he needs to deal with stories such as the curious case of William Hague's adviser. We understand that Mr Coulson advised the Foreign Secretary to publish last week the full statement that stoked the coverage, rather than a more limited and decorous denial. But it is important for wider reasons of standards in public life. Mr Cameron needs to ensure that the public can have confidence in the probity of public servants, and particularly of political appointees on a publicly funded salary almost as high as his own. If Mr Coulson has lied to Parliament, he should go. Furthermore, the Prime Minister needs to dispel the unworthy suspicion that he is colluding with the Murdoch press in trying to play down the story for the sake of his relations with a powerful media mogul.

Yet there is also an important dimension to this story that goes far beyond the immediate fate of Mr Coulson. That is the nature of journalism in this country, and the apparent feebleness with which the basic protections of privacy are enforced. That requires clarity: that subterfuge is occasionally and exceptionally justified in the public interest, but must be described, explained and defended after the event. To be sure, newsrooms will have been scared off illegal hacking by the Goodman-Mulcaire case, but we cannot be confident that it will not creep back.

So there is a responsibility for the media to tighten up the rules so that people – and not only celebrities – can be confident that their privacy is protected. But Mr Cameron has a more pressing responsibility to dispel the serious doubts that surround one of his inner team.