James Murdoch was shown a "damning" email suggesting that phone hacking was widespread at the 'News of the World' more than three years ago, a public inquiry has heard.
The News International boss was also told face-to-face that there was "direct and hard" evidence of illegal practices at the paper going far beyond one "rogue" reporter, according to Tom Crone, the paper's former legal chief.
His account directly contradicted evidence that Mr Murdoch gave to a parliamentary committee earlier this year.
The Leveson Inquiry into media ethics was also told that lawyers hired to trawl through News International emails checking for more evidence of hacking were confronted by an array of "extremely strange" blank or half-blank messages that may have been partially deleted.
Jon Chapman, the former chief lawyer at News International, told the inquiry he had taken part in the trawl of emails and said it "seemed strange" to him that some were blank or partially cut off.
Lord Justice Leveson questioned whether this suggested an unsuccessful attempt to delete the messages from a "sent messages" box.
Colin Myler, a former editor of the 'News of the World', also gave evidence and defended his decision to publish extracts from the diary of Kate McCann, the mother of missing child Madeleine McCann, which she said had left her feeling "mentally raped".
Mr Myler said he had been repeatedly assured by Ian Edmondson, his head of news, that the McCanns had given their blessing to the publication through Clarence Mitchell, their spokesman.
Mr Mitchell has said that he was misled and was never told that the paper planned to publish extracts from a diary leaked through the Portuguese police and sold for €20,000.
Mr Murdoch told a parliamentary inquiry in July that he was not aware of the email in 2008 when he signed off a large payout to Gordon Taylor, the head of the PFA footballers' union, whose phone was hacked. But Mr Crone told the inquiry that he raised it at a meeting with Mr Murdoch and Mr Myler on June 10 that year.
He said he also spoke about a legal opinion, drawn up by the company's lawyers, referring to a "powerful case" that there was a "culture" of illegal information access.
Mr Crone said he believed he held up the front of a printed copy of the email for Mr Murdoch to see.
"What was certainly discussed was the email . . . and what it meant in terms of . . . further involvement in phone hacking. And what was relayed to Mr Murdoch was that this document clearly was direct and hard evidence of that being the case," he said. (© Daily Telegraph, London)