The British newspaper arm of Rupert Murdoch's News Corp looks set to settle at great expense a string of legal claims after admitting wide-scale phone hacking that was both known about and concealed by senior management.
Murdoch's News International had for years claimed that the hacking of voicemails to generate stories was the work of a single rogue reporter who went to jail for the crime in 2007.
However, under a wave of damning evidence last year it finally admitted that the problem was widespread, sparking a scandal that has rocked the company, the British press, police and the political establishment.
In a statement that could further damage the firm's reputation, lawyers for victims who have reached settlements said on Thursday their agreements were based on News Group Newspapers, publisher of some of News International's newspapers, acknowledging that senior management were at fault.
News International declined to comment on the statement.
News Group has agreed to compensation being assessed on the basis that senior employees and directors of NGN knew about the wrongdoing and sought to conceal it by deliberately deceiving investigators and destroying evidence, the statement said.
In a London court packed with journalists and lawyers, Judge Geoffrey Vos went through each case and heard the grounds for the settlement. At the end of each statement a lawyer for News Corp confirmed the details and offered sincere apologies.
Settlements announced in court generally ranged from around 30,000 pounds ($46,000) to 60,000 pounds, while some were not revealed. Actor Jude Law accepted over 100,000 pounds after he was physically surveilled abroad as well as in Britain.
The admissions may also lift some immediate pressure off the group, as it will prevent lawyers from poring over further details in open court, but it could lead to increased scrutiny of James Murdoch, who has been heavily criticized for his handling of the situation.
Murdoch's son James was not in charge of News International at the time of the hacking but has been accused of leading a cover-up by the company. He has denied all knowledge of the scale of the problem and blamed many of those around him for the failings.
The lawyers issued the statement on Thursday as they prepared to tell a judge in a London court that many of the most high-profile victims - who include sports stars, actors and politicians - were ready to settle their claims. The move means that all cases could eventually be settled.
The court was told that 36 claimants were ready to settle, including actor Law, politicians Chris Bryant, John Prescott and Tessa Jowell and other celebrities, while 10 cases were ready to go to court.
News Corp has already received 60 claims and police say there are almost 6,000 potential victims.
Lawyers for the victims said they had obtained documents from News International that revealed its attempts to destroy evidence, partly thanks to the fact that the 12 solicitors' firms involved had joined forces to work together.
As a result, documents relating to the nature and scale of the conspiracy, a cover-up and the destruction of evidence/email archives by News Group have now been disclosed to the claimants, their statement said.
In July, after it emerged that the voicemail of missing schoolgirl Milly Dowler, later found dead, had been hacked into by the News of the World, News Corp took the drastic step of shutting down the 168-year-old tabloid.
The scandal had already forced the resignation of Prime Minister David Cameron's spokesman, a former News of the World editor, while British police were accused of failing to properly investigate the affair, forcing top police officials to resign.
Criminal probes are now under way into the phone hacking and allegations of payoffs to police. A judge-led inquiry into Britain's press ethics also sits most days, bringing yet more attention to the conduct of the press.
And at the height of the scandal, News Corp was forced to scrap plans to take full control of Britain's highly profitable satellite broadcaster BSkyB.
This settlement, which is tantamount to accepting that there was a deliberate conspiracy to deceive the police and destroy evidence, raises fundamental questions both about the inadequacy of press regulation in general and about corporate governance specifically at News International, Steven Barnett, professor of communications at Westminster University in London, told Reuters.
(Reporting by Georgina Prodhan and Kate Holton; Edited by Richard Meares)