Phone hacking was widely discussed at editorial meetings at Rupert Murdoch's News of the World, the reporter who was blamed as the sole culprit said in a letter which threatened to undermine repeated denials by senior News Corp executives.
In a letter written four years ago and published by the Guardian on Tuesday, the former Royal reporter Clive Goodman said the practice of hacking was openly discussed until the then editor Andy Coulson banned it.
Coulson, who had repeatedly denied all knowledge of the practice, went on to become the official spokesman for Prime Minister David Cameron, a move which dragged the affair into the political arena and forced the government to turn on Rupert Murdoch after years of courting his favor.
Goodman, who was jailed in 2007 along with private detective Glenn Mulcaire, said he had been told he could keep his job if he agreed not to implicate the newspaper.
The committee investigating the hacking scandal, which is expected to publish the letter later, said on Tuesday it would likely recall James Murdoch to give further evidence after receiving the Goodman letter and statements from other parties which contradicted his previous testimony.
When we have the further information that we are seeking, I think it is very likely that we will want to put those points to James Murdoch, the head of the committee, John Whittingdale, told reporters.
Parliamentarian Tom Watson, the most dogged MP to question Murdoch, told reporters earlier in the day that the new evidence contained devastating revelations which would raise questions for the company in general.
Allegations of widespread hacking at News Corp's British newspaper arm, and in particular reports that journalists had used investigators to hack in to the voicemails of murder victims, sparked an uproar in Britain that dominated global headlines for almost the whole of July.
It forced the company to close the 168-year-old paper, drop its most important acquisition in decades -- the $12 billion purchase of BSkyB
Two of Britain's most senior police officers also quit over their failure to properly investigate the scandal and 12 people have since been arrested.
Two former News of the World colleagues had previously contradicted information that James Murdoch gave in July.
Whittingdale, who said differences remained over the accounts of what had happened at the newspaper, said the committee was unlikely to recall 80-year-old Rupert Murdoch.
James and his father Rupert appeared before the committee on July 19 and were pressed to explain their understanding of phone-hacking and payments made to the police by the tabloid.
The 38-year-old News Corp
The issue in dispute is how much James Murdoch knew about the hacking, in particular the scale of the problem, and whether he was involved in a cover up.
Murdoch said he had not been in possession of all the facts when he approved a large payout in 2008 to English soccer executive Gordon Taylor, who had his phone hacked.
Critics have argued the size of the payout, which was 10 times the record amount awarded in a privacy case at the time, was intended to buy Taylor's silence.
However Tom Crone, News International's former top legal officer, and Colin Myler, editor of the News of the World until it was shut down in July, have disputed this, saying they had previously shown Murdoch a 2005 email which suggested that the problem was more widespread.
(Created by Kate Holton)