Rupert Murdoch's News International may have to continue funding the legal defence for the convicted phone hacker Glenn Mulcaire, despite the company's promise to cut off the funds that have so far allowed him not to name the News of the World executives who commissioned him.
News International said it ended its financial support for Mr Mulcaire's legal bills after pressure to do so 12 days ago, but there are concerns within the company that it may still have a contractual obligation to assist him.
Mr Mulcaire was jailed in 2007 with the News of the World's royal editor Clive Goodman for phone hacking. Until now, NI had been funding him to appeal against a High Court order that would have forced him to name of the executives who commissioned him to break into private voicemail messages.
Mr Mulcaire's solicitors wrote to News International last week to say they had received no written confirmation "that NGN is going to cease funding our client" and insisted that the firm was still liable to cover his legal costs.
But it is understood that the company remains defiant and will fight any attempts by Mr Mulcaire's legal team to extract money. One source told The Independent: "If they don't like it they can sue."
Mr Mulcaire, who claims he only ever acted on instructions from his employers, has vowed to continue his fight against the High Court ruling.
In a statement on 20 July, News International said: "News Corporation's management and standards committee met this morning and has decided to terminate the arrangement to pay the legal fees of Glenn Mulcaire with immediate effect.
"The MSC [News International Management and Standards Committee] is authorised to co-operate fully with all relevant investigations and inquiries in the News of the World phone-hacking case, police payments and all other related issues across News International as well as conducting its own inquiries where appropriate."
Yesterday a spokeswoman said: "We stand by our previous statement. Mr Mulcaire's funding has been withdrawn." The decision came after Rupert Murdoch's son, James, told MPs that he had been "very surprised" to learn that payments were being made towards Mr Mulcaire's legal fees.