Lord Ashdown warned No 10 about 'terrible damage'

The former Liberal Democrat leader Lord Ashdown contacted David Cameron's office days after the last general election to warn him of the "terrible damage" which would be done if he employed Andy Coulson in Downing Street.

Lord Ashdown is third person to come forward to say that he had warned Mr Cameron's officials about information which could undermine Mr Coulson's assertions that he knew nothing about the illegal practices going on at the paper.

Lord Ashdown, a key player as the Liberal Democrats debated whether to join in a coalition with the Tories, told The Observer that, based on what he had been told, it was obvious Mr Coulson's appointment as Cameron's director of communications would backfire.

"I warned No 10 that they would suffer terrible damage if they did not get rid of Coulson, when these things came out, as it was inevitable they would," he said. The warnings were said to have been given to the Cameron aide Steve Hilton and Ed Llewellyn, his chief of staff – but Mr Cameron insisted they had not been passed on to him.

Nick Clegg, the Deputy Prime Minister, received similar briefings to those given to Lord Ashdown and raised them with Mr Cameron – only to be rebuffed.

Meanwhile it emerged yesterday that Mr Coulson has retained Paul McBride QC, who represented the wife of Tommy Sheridan in a court case in which she was acquitted of lying to the courts in her husband's successful defamation action against the News of the World in 2006. Sheridan was ultimately jailed for three years in January after being found guilty of perjury.

Mr Coulson told the trial in December that he had no knowledge of illegal activities by reporters while he was editor. He also claimed: "I don't accept there was a culture of phone hacking at the News of the World."

Strathclyde Police has been asked to make a "preliminary assessment and report to the Area Procurator Fiscal at Glasgow for consideration of any further action." Police have also been asked by prosecutors to consider specific claims of phone hacking in Scotland.