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News International lifts gagging order imposed on its lawyers

The full extent of the alleged cover-up at the News of the World could be disclosed after News International bowed to pressure and lifted a gagging order it had imposed on its lawyers.

In the latest development in the phone hacking scandal, Rupert Murdoch’s company agreed to release details of its dealings with Harbottle & Lewis, the lawyers who for four years held company emails containing details of wrongdoing at the Sunday tabloid.

Documents held by Harbottle & Lewis, who act for the Royal family, have been described as the “smoking gun” that could prove that senior figures in Mr Murdoch’s empire were aware of hacking but tried to cover it up.

Despite protests from MPs and pressure from the law firm, News International had refused to release Harbottle & Lewis from legal obligations of confidentiality, meaning that the lawyers could not co-operate fully with police and parliamentary inquiries.

Last night the company relented and said it would allow the lawyers to disclose at least some of the information they hold to detectives and MPs. While the move could help to solve the mystery of the company’s response to the scandal, it remained unclear how much information would be disclosed, and whether it would be put in the public domain.

In other developments:

* NI announced that it had stopped paying the legal fees of Glenn Mulcaire, the investigator jailed in 2007 for hacking into voicemails for the News of the World. In response, Mulcaire said that his silence on the issue thus far “may change”.

* Scotland Yard said that the number of officers investigating cases linked to the News of the World had grown from 45 to 60, making it one of the country’s biggest active operations.

* David Cameron admitted for the first time that he had been wrong to employ Andy Coulson, the former News of the World editor, at No 10.

* A former Labour minister alleged that Mr Coulson had been embroiled in the alleged hacking of a senior government official’s phone while in Downing Street. The claims were denied by the Cabinet Secretary.

Emails and other documents held by Harbottle & Lewis are at the heart of suspicions that NI executives knew for several years that criminal behaviour was widespread at the newspaper, but chose not to act.

In 2007, following the jailing of Clive Goodman, the former News of the World royal editor, an internal inquiry was ordered. It was overseen by Jon Chapman, NI’s then director of legal affairs, and Daniel Cloke, the human resources director, who collected 2,500 emails between journalists on the paper. Les Hinton, one of Mr Murdoch’s closest colleagues, who quit last week, is said to have supervised the process.

Some of those emails were passed to Harbottle & Lewis, which was asked to examine them. The lawyers reported back that the emails did not show that journalists on the paper’s newsdesk were aware of phone hacking by Goodman or Mulcaire.

Rebekah Brooks, Mr Hinton, and other executives used the Harbottle report to argue to MPs that Goodman had been a lone “rogue” reporter.

However, the firm’s conclusions have been strongly challenged since. Lord Macdonald of River Glaven, a former director of public prosecutions who reviewed some of the emails for NI in May, said that they contained “blindingly obvious” evidence of criminality. NI claimed to have retrieved the emails from Harbottle & Lewis in April and finally passed some of them to police on June 20. The firm has yet to explain the delay fully. But its full correspondence with the lawyers remained sealed.

Some MPs believe that the law firm was asked to answer only very narrow questions about the emails, allowing the lawyers to give NI what appeared to be a clean bill of health over hacking and other crimes.

The culture, media and sport committee this week pressed James Murdoch to reveal the precise instructions that were given to Harbottle & Lewis in 2007. Yesterday morning, the firm told the committee that NI was still refusing to release it from its obligations, drawing criticism from both Conservative and Labour MPs.

Mr Cameron said that information held by Harbottle & Lewis should be given to the police and the forthcoming public inquiry into media standards.

After those comments, News Corporation announced last night that it had authorised the law firm “to answer questions from the Metropolitan Police Service and parliamentary select committees in respect of what they were asked to do.”

A statement added that the company would “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.”