Emails published today show that News International boss James Murdoch was sent details in 2008 of claims that phone-hacking was "rife" at the News of the World.
But Mr Murdoch told the House of Commons Culture Committee, which is investigating the hacking scandal, that he did not read the email exchange forwarded to him by the paper's then editor Colin Myler.
In an email dated Saturday June 7 2008, Mr Myler requested a meeting with Mr Murdoch to discuss the case being brought against the paper by Professional Footballers Association chief executive Gordon Taylor over claims reporters had eavesdropped on his messages.
The News of the World editor warned Mr Murdoch: "Unfortunately, it is as bad as we feared."
Attached to his message was a "chain" of emails detailing discussions between News International's legal adviser Julian Pike of Farrer & Co and Mark Lewis, who represented Mr Taylor.
Mr Murdoch and Mr Myler met three days later on June 10, along with Tom Crone, legal manager for the NotW's publishers News Group Newspapers. Mr Myler and Mr Crone say that they told Murdoch at that meeting about the discovery of the notorious "For Neville" email, which proved that phone-hacking was not limited to a single "rogue reporter" on the paper as the company had claimed.
But Mr Murdoch insists that the meeting was simply to authorise an increased settlement offer to Mr Taylor and that he was not shown the email or told that it proved that wrong-doing was more widespread than previously thought.
The email exchange released today shows that Mr Pike wrote to Mr Crone on June 6, following his meeting with Mr Lewis.
Mr Pike said that Lewis had told him Taylor "wishes to be 'vindicated or made rich'. He wishes to see NGN suffer. He wants to demonstrate that what happened to him is/was rife throughout the organisation. He wants to correct the paper telling parliamentary inquiries that this was not happening when it was."
The solicitor noted that Mr Taylor was referring to NGN's position that Clive Goodman - the royal correspondent jailed in 2007 for intercepting messages - was a "rogue trader" acting alone with private investigator Glenn Mulcaire.
NGN had already offered Mr Taylor a £350,000 settlement, but he was demanding "seven figures plus indemnity costs", which could run to £1.2 million, said Mr Pike, who told Crone he would meet Mr Mulcaire to try to prepare a defence.
Mr Crone forwarded the message to Myler, making clear that details of the hacked emails were contained in what he refers to as "the Ross Hindley email" - believed to be the message entitled "For Neville" obtained by Mr Taylor.
Mr Crone voiced his concern about a "nightmare scenario" in which the PFA's in-house lawyer Joanne Armstrong may be able to sue because voicemails were also taken from her phone.
"There is a further nightmare scenario in this, which is that several of those voicemails on the Ross Hindley email were taken from Joanne Armstrong's phone. We can also assume that she will have seen this evidence and is waiting to see how Taylor's case concludes before intimating her own claim," he wrote.
He said he expected the company to enter a defence that while it "knew of and made use of the voicemail information Mulcaire acquired between Feb(ruary) and July 2005" - the period of the hacking which led to Goodman's conviction - it did not know whether "any of its employees... acted in concert with" him over the following year.
Mr Crone also refers to a tape obtained by Mr Taylor, which the PFA boss alleges records Mulcaire informing someone called Ryan about how to get into his voicemail. But the NGN legal manager says that Mulcaire appears to address the person as "Rial", which "can only be helpful" to the paper's case as it has never had a reporter of that name.
Passing the email exchange on to Mr Murdoch in an email with the heading "Strictly Private and Confidential and subject to legal professional privilege", Mr Myler wrote: "Update on the Gordon Taylor (Professional Football Association) case. Unfortunately it is as bad as we feared.
"The note from Julian Pike at Farrer's is extremely telling regarding Taylor's vindictiveness. It would be helpful if Tom Crone and I could have five minutes with you on Tuesday."
In a response timed just two minutes later, Mr Murdoch said: "No worries. I am in during the afternoon. If you want to talk before, I'll be home tonight after seven and most of the day tomorrow."
In a letter to the Culture Committee yesterday, Mr Murdoch said that he had forgotten about the email exchange until he was reminded of it on December 7 by the Management and Standards Committee set up by NI's owners News Corp to look into the hacking affair.
Mr Murdoch told the Commons committee that he was "confident" that he did not review the chain of emails before or after agreeing to meet Mr Myler and did not have a phone conversation with the NotW editor that weekend.
"Having agreed to meet the following Tuesday, I would have relied on the oral briefing on 10 June 2008 that I have previously described in my testimony before the committee," he wrote.
In a statement released later, Mr Murdoch said: "I was sent the email on a Saturday when I was not in the office. I replied two minutes later accepting a meeting and did not read the full email chain.
"As I have always said, I was not aware of evidence of widespread wrongdoing or the need for further investigation."
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