Someone working for The Sunday Times called Abbey National pretending to be Gordon Brown to obtain details about the former prime minister's finances, the paper's editor said today.
John Witherow confirmed that the paper "blagged" information from the bank as part of an investigation in 2000 into the then-chancellor's purchase of a flat from a company owned by the late media baron Robert Maxwell.
The Sunday Times has argued that the story was in the public interest and that this would provide a defence to any charges brought under the Data Protection Act for accessing personal details, the Leveson Inquiry into press standards heard Mr Witherow said the paper used a businessman called Barry Beardall to discover from a firm of solicitors how much Mr Brown paid for the flat.
"We believed that Mr Brown had purchased the flat at a cheaper price than valuers had put on it at the time," he said.
Robert Jay QC, counsel to the inquiry, asked him: "Abbey National, which held Mr Brown's mortgage for the flat, wrote to you alleging that someone had called its Bradford call centre six times pretending to be Mr Brown and was given information?"
Mr Witherow agreed: "That's right."
Mr Jay went on: "Did someone on your behalf pretend to be Mr Brown to blag that information?"
The editor replied: "Yes." He confirmed the blagger was not Mr Beardall.
An article published in the paper in July last year said: "The Sunday Times is still trying to establish whether any journalist then on the paper sought to access Brown's mortgage information.
"Even if they had, such activities would have been legal as the story was clearly in the public interest.
"Section 55 of the 1998 Data Protection Act makes it an offence to access personal data - but also makes clear that this does not apply if 'the obtaining, disclosing or procuring was justified as being in the public interest'."
Mr Witherow said the Sunday Times sometimes used subterfuge for stories in the public interest but did not carry out "fishing expeditions".
He said the paper has employed blagging and impersonation, including employing an actor as part of a deception, but has never hacked phones.
The editor stressed that the Sunday Times always considered whether it was justified in publishing a story.
"We have been given private information about ministers involving their financial affairs, which we could see no public interest in publishing, so we haven't," he said.
Mr Witherow said he met the Prime Minister, the Chancellor and other senior Cabinet ministers "from time to time", but played down the significance of these discussions.
He told the hearing: "When you meet them in private, you don't often learn much more than you would from their speeches or when they are giving interviews on TV.
"It's remarkable how little extra information you do get."
Meanwhile, Private Eye editor Ian Hislop argued it was in the public interest to expose former Royal Bank of Scotland boss Sir Fred Goodwin's affair with an ex-colleague.
He told the inquiry: "Is that his private life? Or is it permissible to write about that on the grounds that perhaps when you're taking major decisions involving risky financial manoeuvres, someone you're sleeping with doesn't say harshly, 'You're mad' at set times?
"You can see I believe that there is a defence there."
Mr Hislop rejected calls for statutory regulation of the press, saying there was already legislation in place to tackle abuses like phone hacking.
He told the hearing that the law was not rigorously enforced because of the close relationship police and politicians had with senior media executives.
The editor defended the use of "blagging" by journalists carrying out investigations into wrongdoing and warned against introducing strict privacy laws like those found in France.
He said: "I do think that statutory regulation is not required. Most of the heinous crimes that came up and have made such a splash in front of this inquiry have already been illegal.
"Contempt of court is illegal, phone tapping is illegal, policemen taking money is illegal. All of these things don't need a code, we already have laws for them.
"The fact that these laws were not rigorously enforced is again due to the failure of the police, the interaction of the police and News International - and let's be honest about this, the fact that our politicians have been very, very involved in ways that I think are not sensible with senior News International people."
He said he hoped that inquiry chairman Lord Justice Leveson would call Prime Minister David Cameron and his predecessors Tony Blair and Mr Brown to give evidence.
Mr Hislop, who has edited Private Eye since 1986, said 40 libel actions had been brought against his magazine since 2000, of which 26 were withdrawn, 11 settled, one resulted in a hung jury and two were won.
James Harding, editor of The Times since December 2007, said his paper had concerns about paying for stolen goods when it turned down the MPs' expenses story that was later published by the Daily Telegraph.
He told the inquiry that with hindsight he considered there may have been a public interest defence to buying the CD that contained details of abuses of Parliamentary allowances.
"This is certainly the lesson that I draw: it was that you have to have a set of rules in a newsroom, you have to have a set of standards and a culture," he said.
"But you also have to be willing to break them in the event that you are presented with a story that is overwhelmingly in the public interest."
The editor defended The Times' coverage of the phone-hacking scandal, which was first broken by the Guardian in summer 2009, but said he wished it had pursued the story more vigorously earlier on.
He said his paper reported the story on the front page every day for nearly three weeks after it emerged last July that the News of the World hacked murdered schoolgirl Milly Dowler's phone.
He added: "Looking back, I certainly wish that we had got on the story harder earlier.
"The reality, of course, is that both News International and the police poured cold water on it at the time, and we went to the sources that we had to try and chase it up, and ran off those.
"It was only later that we could fully get to grips with it, but of course it was and has proved a very important and significant story."
Guardian editor Alan Rusbridger criticised new rules requiring Cabinet Ministers and their opposition counterparts to keep a record of every meeting they have with newspaper editors.
"If you make it too rigorous, that you have to note every single meeting, then I think that militates against the flow of information between politicians and the press," he told the inquiry.
Mr Rusbridger noted that previous Guardian editors had much closer relationships with the prime ministers of their time.
He said: "Alastair Hetherington, my predecessor, used to have almost weekly meetings with Harold Wilson.
"Lloyd George used to run his cabinet changes past CP Scott before he did them, so I don't think this is a new problem."
Mr Rusbridger said any Guardian reporter who wants to access information using subterfuge needs to justify that the story is in "exceptional public interest" and they need prior consent from their department head.
He said on principle reporters at the newspaper give the subjects of stories prior notification, but added that he was against any mandatory requirement to do so.
Mr Rusbridger added that reporters are guided by an editorial code which sets out standards which should be met before they intrude into a subject's private life.
Mr Rusbridger said there should be a Press Standards and Mediations Commission with an adjudication wing, so people would not have to go to the law to address any differences with newspapers.
He said he "wouldn't be against the use of statute" if a regulator could enforce its powers to deal with libel complaints. He said if the law changed then other publishers should welcome it because it would make resolving cases cheaper and swifter.
But he added: "We utterly reject anything that looks like state licensing and we reject anything that looks like politicians or the state having any kind of say in the content of newspapers."
Mr Rusbridger continued: "The blunt truth about our industry is that we have been under regulated and over legislated.
"If we can get a better balance of better legislation and better regulation as a result of it (the Leveson Inquiry) then that to my mind is a good thing."
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