The Leveson Inquiry resumed this week; with widely publicised evidence from former News of the World and Number 10 spin doctor Andy Coulson and Rebekah Brooks.  There were also a number of other important developments with the Metropolitan Police reporting their investigation into whether Milly Dowler’s voicemails were deleted.  Robert Jay QC officially began module three of the inquiry – examining the relationship between the press and politicians – with an opening statement.

On Wednesday morning, Lord Justice Leveson addressed an application sent to the inquiry by non-profit organisations, asking the judge to consider a ruling allowing government advisors early access to confidential inquiry documents.  Full Fact, The Media Standards Trust, Index on Censorship and English PEN made the application on Tuesday, urging Leveson LJ to publish the names of any senior civil servants who will be able to see this material, to make sure the process remains transparent. It followed a ruling made in the previous week, granting core participant status to David Cameron, Nick Clegg, Vince Cable, Jeremy Hunt, Michael Gove, Theresa May, Ken Clarke and George Osborne.

The chairman said he would not publish names but expected government ministers granted core participant status to restrict their “confidentiality circle” to a minimum. He also said requests for redactions to evidence by ministers would be treated in the same way as those of other core participants. He added:

“I do not doubt the good faith of those who have raised these issues although in the light of the way that I have tried to conduct this inquiry throughout, I am somewhat concerned that it is thought that I might be party to reducing its transparency. Suffice to say I will not, and I would be surprised if I were asked to be.”

Neil Garnham QC, representing the Metropolitan Police at the inquiry, then read a statement from DCI John MacDonald, the officer leading the investigation into the potential deletions of Milly Dowler’s voicemail messages.

DCI MacDonald said it was impossible to conclude how messages from Milly Dowler’s voicemail were deleted, which created a moment of “false hope” for her family.. He said it was possible an illegal intercept had resulted in messages being deleted, but could also have been done automatically by the phone service. The lack of call data, and the amount of time that has passed since the teenager’s disappearance in 2002, means there is not enough evidence to prove whether or not the News of the World was responsible.

As a result of Milly’s voicemail becoming freed up by the deletion of messages, her mother Sally Dowler described a moment of “false hope” in 2002, believing her daughter could still be alive if the messages had been accessed. The Dowlers had previously said the moment occurred in April or May 2002 but the Met now say they have proved it to be on March 24.

David Sherborne, representing core participant victims, read a short statement from the Dowler family, which thanked MacDonald as his team for investigating the matter. It continued:

“If Surrey Police had prosecuted this activity in 2002 then the position would have been very different and perhaps countless others might also have been avoided having their private messages hacked into by the News of the World.  Police neglect and deference meant that it took the relentless efforts of one journalist to uncover what the police knew had gone on, and whilst we would never have wished to have been thrust into the middle of this extraordinary scandal on top of what we have already had to deal with as a family, we continue to have faith that his efforts and the efforts of the inquiry and Operation Weeting will have a lasting positive impact.”

The Met said they have been working to discover whether the messages had been accessed before the 26 March 2002, but call data and Surrey Police logs on the missing teenager’s phone did not match up, and a message marked as saved on the service could have been accessed by a third party. The statement added:

“The fact that this message was marked as saved could mean that someone had listened to Milly’s voicemail after her disappearance and prior to the police obtaining access to her voicemail facility later on 26 March 2002.”

DCI MacDonald said he could not rule out that someone had accessed the service and listened to the message during this period, but incomplete call data meant the accuracy of the theory could never be proved. He added:

“In summary we cannot conclusively say whether any voicemails were or were not manually deleted, however there do appear to have been two messages missing that should have been present when Surrey Police carried out their second recorded download of 17 April. It is not known why that happened and it will not now be possible to provide an explanation. In light of the NoW revelation that they or a third party has accessed the voicemail it is possible that the messages had previously been listened to by unknown persons and deleted.”

Mr Sherborne suggested a “lethal cocktail of three potential ingredients – the failure of Surrey Police, the decision of the Met to close the 2006 hacking investigation and concealment by News of the World senior staff – was responsible for the uncertainty around how the voicemails were deleted”. He added:

“While some questions stay and may always remain unanswered there are some to which we do know the answer. The News of the World did hack into Milly Dowler’s phone searching for a scoop at a time when she had already been murdered. That fact alone is horrifying enough.  We also know that the newspaper interfered seriously with the police investigation trying to use the information they had illegally obtained to get an exclusive on Milly’s movements.  Thirdly this inquiry investigating as it has done the practices, culture and ethics of the press would have happened regardless of the question which arose at the start of the evidence that Sally Dowler’s false hope moment may have been the result of activity of someone at or working for the newspaper.”

Guardian lawyer Gill Phillips said the statement clearly showed Surrey Police linked the potential deletions to the News of the World in 2002, but admitted her paper had made an error in reporting the cause of the deletions as fact rather than the belief of several people involved in the case. The newspaper provided the inquiry with a timeline of events as they believe them to be true.

The first witness of the day, DCI Brendan Gilmour, told the inquiry seven journalists were interviewed under caution in 2004 after evidence suggested they had been commissioning private investigators to obtain information illegally.

The senior officer who worked on Operation Glade, investigating police corruption from 2002 to 2005, said all of the journalists – two working for the News of the World, one for the Mirror, one for the Sunday Mirror, one for the Mail on Sunday and two freelancers – had said they would not have used private investigator Steve Whittamore, or other agencies, if they had known how information had been accessed.

He said there was clear evidence that civilian employee Paul Marshall was providing information from the police national computer to private investigators at the request of a number of reporters.  He added:

“It was put to the journalists that the speed with which the checks were being turned around would suggest they weren’t being obtained through the courts or court records but that said we couldn’t establish guilty knowledge of the part of the journalists as to where that information was coming from.”

Mr Jay QC pointed out the journalists were sent written invitations to attend places to be interviewed under caution, and had legal advice, meaning answers could have been orchestrated in advance. In March 2004, the Crown Prosecution Service advised there was insufficient evidence to charge any of the journalists. Gilmour told the inquiry:

“I accepted the decision on the basis that we couldn’t prove guilty knowledge. I wasn’t disappointed with the CPS taking that decision; I was disappointed that we couldn’t prove guilty knowledge.”

Russell Middleton, an acting chief constable and deputy senior investigating officer on Operation Reproof, examining corruption at Devon and Cornwall police, said he had discovered a flow of information from an officer to a private investigator, who then passed it on to various companies. The police never found evidence of requests from journalists, but he confirmed it would have been included in the scope of the inquiry. 37 people were investigated under Reproof, and two serving police officer, two former officers and two private investigators were charged in 2004.  Middleton said two senior politicians had been named in the evidence retrieved.

In the afternoon hearing, the inquiry heard evidence from Mail Online editor Martin Clarke, who answered questions on the business model of the website. He said the site had mistakenly reported Amanda Knox had been found guilty of murder because of “human error and overzealousness” .The Mail was one of several news outlets criticised for publishing a story immediately after a verdict was announced during the trial last year, stating Knox had been found guilty of killing student Meredith Kercher in Italy. Martin Clarke said the site had prepared two stories in advance and accidentally published the wrong one because of confusion over the verdict. He told the inquiry:

“The thing than made me angriest was that there was no need for it… We had a thorough inquiry, as you can tell, advice was issued, firm advice, to people, and I’ll be very displeased if any of those things happen again.”

Clarke, who said the Mail Online publishes 400-500 stories a day, was asked about his editorial and commercial control. He said the site has become popular worldwide because of it responds to the demands of the audience. He added:

“Millions and millions of people enjoy popular culture and thank goodness for showbiz stars that they do, otherwise they’d all be out of business. There’s nothing wrong with watching X Factor or reading about it. I have to produce a website which makes a profit because profit is the only real way of having any freedom in journalism.  Most [celebrities], their biggest concern in life is not appearing on it. This is a very good example of a nexus between PR, freelance pictures agencies and newspapers and websites. And quite often I think the inquiry has to guard against pictures that might to the man in the street seem to be intrusive were in fact taken with the celebrity’s full consent.”

The editor said a picture set of an actress from the popular television show ’The Only Way is Essex’ on holiday was not intrusive.  He said:

“It was self-evident to me that those pictures were taken with consent. You can see the photographer, its on a very short lens, right in front of her… I would stake my year’s salary on it being taken with consent.”

He echoed evidence given by Paul Silva, the Daily Mail’s picture editor, earlier this year, saying the site abided by an unofficial embargo of pictures showing Pippa Middleton going about her day-to-day business. He insisted the Mail Online had a good track record with complaints and called its sister paper “an ethical and decent newspaper run by decent people”.  He added: “Quite often [celebrities] will ring up and say ‘you didn’t get that quite right’, or ‘I’d rather you didn’t say that’ or ‘actually the truth is this’, so quite often we’ll just correct content as we go along.”

David Barr, junior inquiry counsel, pointed out the Mail Online has had 205 legal complaints – 35 for privacy issues – in the last three years, compared to six privacy complaints through the Press Complaints Commission.

On regulation, Clarke expressed concern that tightening restrictions would leave news websites with a disadvantage compared to US competitors. He said:

“My question is: do you need to regulate the internet anymore than you need to have a policeman standing in the corner of very pub watching what everyone says?” Now we’re obsessing over an industry that is, as I say, becoming less important, and in the course of fighting the last war, we’re going to stop newspaper websites from winning the next one, quite frankly, if we place the British press and British websites under a regulatory environment that is too strict.”

The hearing ended with David Sherborne asking Lord Justice Leveson to consider information uncovered by Operation Motorman, which examined the mining of private information by private investigator Steve Whittamore. The lawyer said the investigation uncovered a widespread practice of buying information from private investigators and asked the judge to look at steps taken against journalist clients of Whittamore and whether information obtained by the investigator is still being retained and used by newspaper publishers. He said:

“[Whether] this is more or less serious than hacking is irrelevant, because both were the unlawful tricks of a very tawdry trade in people’s private information.. these newspapers continued to use Mr Whittamore after his offices were raided, after he was arrested, after their journalists were interviewed, after Mr Whittamore was convicted and even after [ICO report] ‘What Price Privacy Now’ was published.”

He later added: “I apologise for being colloquial, but the question for you is: was it cover-up or clean-up once Operation Motorman had revealed what it revealed?”  Lord Justice Leveson said he would consider investigating whether information accessed by Whittamore was being held by newspapers as it was relevant to the “here and now” of the inquiry.

The Thursday morning hearing began evidence from Lord Rothermere, executive chairman of the Daily Mail and General Trust. He said he believed it was his job to remain politically neutral and not interfere with the running of his newspapers, denying his publications had political allegiances.

He admitted visiting Chequers two months after the 2010 general elections for a weekend with David and Samantha Cameron among others, but said Rupert Murdoch’s BSkyB bid had not been discussed. Rothermere said media topics had barely come up in conversation despite the attendance of education secretary Michael Gove and Jeremey Hunt.  He added:

At Chequers it was a friendly weekend. We were getting on … I didn’t want to bring up business. It’s sort of rude to do that if you’re invited to someone else, even if it is the prime minister, on a friendly basis. The only conversation I had with any minister about media issues was when Jeremy Hunt arrived. We talked a bit about local TV. Jeremy was very passionate about his ideas for local TV and wanted us to be a core participant of that.

Daily Mail and General Trust joined the publishers of the Telegraph, Guardian and Mirror in opposing the News Corporation BSkyB takeover bid.

The peer said he rarely sent text messages to politicians, but admitted texting David Cameron to congratulate him after one of the leaders’ debates preceding the general election.  His diary showed regular meetings with Gove and a dinner and a lunch with George Osborne in late 2010.

Lord Rothermere then told the inquiry that Murdoch MacLennan, a former executive at his company, had asked Richard Desmond to stop attacking him in the Express, 2001. He added:

“I wasn’t that offended by it. He seemed to think the fact that I have an illegitimate son is of some concern … I’m very proud of my son, he’s a member of my family, we go on holiday together and my children are very proud to call them their brother and I don’t make a secret of it and the idea that I’m offended by it is slightly offensive.”

On regulation, he said: “It’s hard to imagine, though, a free press that isn’t run by commercial interests. We try to be as fair as we possibly can, we believe in ethics, that good journalism is ethical journalism, in putting our faith in journalists – most journalists on the whole are good people and want to find the truth.”

Following Rothermere’s evidence, module three began with an opening statement by Mr Jay QC. He  said module three will ask whether the relationship between politicians and press has “got out of hand”  and whether it needs to be recalibrated.  He said informal contact between politicians and the media can be a part of a healthy democracy, but said the relationship changes when the public is mislead or politicians pay more attention to press coverage than polices, or the perception is that is the case.

The inquiry counsel said News International has the greatest potential influence over politics, and Associated Newspapers has important links with the middle classes. He made it clear the inquiry will not allow Leveson LJ to decide over the future of Jeremy Hunt, but is concerned with how close he was to News Corp at the time of the BSkyB bid. On emails between Fred Michel and News Corp he added:

“If the emails were direct communication between the culture secretary and James Murdoch the case would be relatively clear cut. They are not. What we see is light refracted through two intermediate prisms. Inevitably what we are seeing is not white light but many colours of the rainbow.”

The inquiry then moved on to Independent on Sunday editor John Mullin, called by the chairman to answer questions on an article on Andy Coulson. The story was apparently based on information included in Coulson’s witness statement, which had not been released in the public domain.  Mr Mullin told David Barr, inquiry counsel, he was involved in the decision to publish the story, and said although the paper had received the statement from an undisclosed source, it had confirmed the details of the story – that Coulson had shares in News Corp when working at Number 10 – beforehand. Mullin said the paper had three separate sources on the article.  He added:

Had we been a daily newspaper we would have been perfectly able to publish the story we published in the Independent on Sunday on Thursday before even receiving the statement…Nothing that appeared in our story didn’t come from the three sources that I’ve outlined. My job as editor is to put in the public domain the key question that has to be answered. I think putting that in the public mind before Andy Coulson gives evidence is perfectly defensible journalism.

Mullin apologised for causing trouble to the inquiry, saying the paper’s intention was to “get to the bottom of this issue”.

The only witness of the afternoon hearing was Andy Coulson, former editor of the News of the World and former communications director to David Cameron.

He said he told Cameron he had no knowledge of phone hacking at the News of the World, during a conversation in 2007, and the prime minster sought no further assurances over his links to the scandal after July 2009.  He added:

I was able to repeat to him what I had said publicly, that I knew nothing about the Clive Goodman and Glenn Mulcaire case in terms of what they did.

Coulson said Tony Blair and Gordon Brown sent him text messages of support following his resignation from the paper, but could not remember receiving one from Cameron. He said he may have discussed News International with George Osborne in early talks for the Number 10 position.

He was also asked about shares in News Corporation, as revealed by the Independent on Sunday last week, saying they were part of his severance deal and had held them throughout his time as communications director.  He said he had a busy job but should have “take[n] the time to pay close attention to my own circumstances in this regard.” He admitted not disclosing the existence of the shares to anyone in the Conservative Party.

Coulson said it was clear the Conservatives were interested in hiring him for the job.  He told the inquiry:

“In truth it didn’t feel like an interview at all.  I think it was clear from the off that they were interested in hiring me … And he said that they were going to make changes to the professional setup and that he would like me to meet Mr Cameron.”

Mr Coulson went on to say:

“The route from journalism to politics, you know – I was hardly the pioneer. There had been several people through the history of politics who had gone from newspapers into politics. There may well have been a conversation about, you know, the fact that I worked on the News of the World and maybe we discussed some individuals in that regard.”

Mr Coulson said Rupert Murdoch was “warm and supportive” but he was not particularly close to the proprietor. He said they spoke twice a month to discuss the paper. He said he had no knowledge of the BSkyB bid before it was announced, and did not discuss it with Rebekah Brooks or Jeremy Hunt.

He was also asked about Matt Driscoll, the former News of the World sports reporter who described a culture of bullying at the paper under Coulson. Driscoll was awarded £800,000 for unfair dismissal.  He said:

“I’m not sure I knew about it in advance but it attracted media attention when it was under way. I have no recollection of knowing about it in advance. I was working with the Conservatives at that point, I took the view it would only make it worse if I tried to intervene. I didn’t have the view I could impose myself on the hearing and I’m not sure at what point what I consider the damaging points in the judgment were made. Probably the damaging comments came at the conclusion, by then it was too late anyway.

The Friday morning and afternoon hearings were taken up with evidence from Rebekah Brooks. The former News International chief executive said she had spoken about the phone hacking scandal with the Prime Minister on a few occasions between 2009 and 2011 in general terms, and after the Guardian reported Milly Dowler’s phone had been hacked.

Ms Brooks told the inquiry Cameron, George Osborne and Tony Blair had commiserated her following her resignation from the company last year. Both Cameron and Blair attended Brooks’ 40th birthday party, thrown by Rupert Murdoch. She said:

“The phone hacking story was a sort if constant, or it kept coming up. We would bring it up but in the most general terms. Maybe in 2010 we had a more specific conversation about it. I think it was nothing particularly that he wouldn’t have said publicly, but he was interested in the latest developments and asked me about them and I said to him what I say to everybody when they asked me for an update on it. It was to do with the amount of civil cases coming in around 2010 and we had a conversation about it.”

She denied reports Cameron texted her 12 times a day, saying it was around once a week – twice a week during the 2010 election campaign – and said the messages concerned organising meetings, social occasions and occasionally personal comments. She added:

“[Cameron] would sign them off “DC” in the main. Occasionally he would sign them off “LOL”, actually until I told him it meant “laugh out loud” and then he didn’t sign them like that anymore.”

When asked about News Corporation’s BSkyB bid, Ms Brooks said she had an informal role in lobbying but was not involved in the proposed deal or the strategy behind it. She confirmed evidence given by James Murdoch, who said the bid had been briefly discussed at a dinner with Cameron in 2010, and admitted personally discussing the bid with both the Prime Minister and Osborne.

Ms Brooks admitted having a close personal relationship with Rupert Murdoch, but denied politicians sought access to the proprietor by getting close to her, saying her personal relationships were all appropriate. She told the inquiry:

“I mean we all have lots of different friendships. Old friends, new friends, work colleagues, associates. And through the decade that I was a national newspaper editor, the years I was a CEO and the ten years I was a journalist, some friendships were made. But I don’t think I ever forgot I was a journalist and I don’t think they ever forgot they were a politician.”

Ms Brooks was asked about former prime minister Gordon Brown, who she claimed called to complain after the Sun criticised him for sending a poorly-spelled letter to the mother of a recently deceased soldier. Rupert Murdoch has previously told the inquiry Brown rang him to discuss the Sun’s decision to support the Conservatives in the 2010 election.

Ms Brooks said Brown had shown “extraordinary levels of aggression” as she reassured him she had spoken to Sun editor Dominic Mohan and the Sun’s coverage would not be a series of personal attacks. She told the inquiry earlier Brown “was probably getting the bunting out” when her resignation was announced.

She said:

“Previous to that conversation, I had also indirectly had similar – not threats made but similar sorts of comments made about the Sun abandoning Labour after 12, 13 years – hostile comments. So when Mr Murdoch told me his conversation, it didn’t surprise me. … I don’t think its fair to say that politicians live in fear of newspapers, they are highly-motivated, ambitious people, and MPs don’t scare easily.”

Ms Brooks said her relationship with Brown became fraught after the Sun took the side of Blair over the infamous “curry shop coup”, the attempt of some Labour politicians to out Blair as prime minister. She told the Inquiry:

“It wasn’t a playground spat, they were the Prime Minster and the Chancellor of the Exchequer. We were a newspaper who was looking after the real serious concern of our readers. So it wasn’t that I would stand on one corner of the playground and [Guardian editor] Alan Rusbridger would stand on the other… and it would be he was on Gordon’s side and I was on Tony Blair’s, it just didn’t work like that.”

Ms Brooks said the timing of the Sun’s decision to back the Conservative Party in 2009 was decided between her, Mohan, the paper’s political team, and James and Rupert Murdoch, denying Cameron and his advisors had a role in the timing of when the support would be announced. James Murdoch told Cameron of the shift in September 2009.

She admitted disagreeing with Murdoch during her time as editor of the Sun, on several issues including the amount of celebrity coverage in the paper, but said they spoke “very frequently”.  She added:

“You only have to look at the viewing figure of the BBC or ITV to see that it’s the celebrity programs, the reality programs that do so well, and I took from those figures that our readers were quite interested in that. He thought there was too much of it, although he liked the X Factor.”

Asked about Rupert Murdoch’s comment to reporters that the CEO was his priority in the hacking scandal, Ms Brooks said she was not embarrassed at the time because she believed he was referring to the issue rather than her personally. She told the inquiry:

“He was being asked by many reporters lots of different questions, and I think someone said ‘what is your priority’ and he looked towards me and said ‘this one’. I took that to mean he meant as in this issue. It was only the next day when I saw how it could have also been interpreted in the papers that I realised that was the interpretation that had been put on it. I wasn’t embarrassed at the time because I didn’t know that that’s what he meant.”

Ms Brooks provided the inquiry with an email sent to her by News Corp’s head of communications, Frederic Michel. The message claimed Jeremy Hunt wanted advice on his position on the hacking allegations.  Michel wrote to Brooks: “JH is now starting to look into phone hacking practices more thoroughly and has asked me to advise him privately in the coming weeks and guide his and No 10’s positioning.”

The email, sent on 27 June 2010, said Hunt would make reference to hacking in a statement on Rubicon, the name for News Corp’s BSkyB bid proposal, calling the knowledge “extremely helpful”.  A spokesman for Hunt, then in charge of overseeing the bid, called the claim “completely inaccurate”.

Brooks said she suspected Michel had exaggerated his contact with the minister’s office.  She added:

“I think the truth is at the time of the BSkyB bid, I suppose, like most journalists, I viewed public affairs and lobbyists with slight scepticism and I often thought that Mr Michel perhaps over-egged his position. However, he was doing his job. He was passing on information as lobbyist do… I always thought the level of access that seemed to come out was pretty good, really.”

The former CEO admitted to discussing the bid with George Osborne in 2010 but said any comments made to David Cameron at a private dinner in the same year were “not to be dwelled on”. James Murdoch previously told the inquiry he raised the matter with Cameron at the dinner hosted at Brook’s home. On the conversation with Osborne, she said:

“I think it was an entirely appropriate conversation. I was re-reflecting the opposite view to the view that he had heard by that stage from pretty much every member of the anti-Sky bid alliance on many occasions, so I think for one three minute conversation at the beginning of the dinner, I got the opportunity to give our view, I don’t see why that’s inappropriate.”

Ms Brooks told the inquiry she may have spoken to former assistant commissioner John Yates about phone hacking, the 2009 Police Bravery Awards coincided with the Guardian article alleging the practice at News International, but said she had not sat down with the Metropolitan Police officer to discuss it at length.

She refused to disclose the Sun’s source for a 2006 article revealing Gordon Brown’s son had cystic fibrosis, telling Jay QC that it had come from the father of a fellow patient, with links to a charity. She said the story had been run with the permission of Brown and his wife, and said the couple had remained friendly after it was published.  She added: “I was very friendly with Mrs Brown she had been through a hell of a lot. First thing I would have said would have been much more considerate and caring. I was very sad for them.”

Ms Brooks admitted the News of the World had mishandled the Sarah’s Law campaign by naming and shaming known sex offenders, but said she could not have predicted reprisals, including one incident where a paediatrician was mistakenly attacked by a group believing the doctor was a paedophile. She added:

“I felt that although there were some aspects to the campaign – and there always risk with any kind of public interest journalism and there’s always risk with campaigning, although there were some issues with the campaign, I was the mechanic in a way to try and explain to the public what the point of the campaign was, was effective and I think there were about 13 or 14 pieces of legislation brought in subsequently on the back of it.”

She went on to deny pressuring Ed Balls MP to sack children’s service director Sharon Shoesmith over the Baby P case, but said she had spoken to then Secretary of State about the case.

Barristers representing newspaper core participants challenged David Sherborne’s Operation Motorman application. Desmond Browne QC, acting for Mirror Group Newspapers, called the task “impossibly burdensome” and said it did not address the terms of the inquiry. The opposition was echoed by Antony White QC, for News International – who said it would require a “disproportionate effort” – and Jonathan Caplan QC for Associated Newspapers.

Mr White QC also requested he be allowed to make an opening statement on behalf of News International. Leveson LJ is expected to make a decision on the application in a few days.

The witnesses giving evidence to the inquiry next week are Alastair Campbell, Lord O’Donnell, Adam Boulton, Lord Wakeham, Jack Straw MP, Sir Harold Evans and Peter Oborne.

Natalie Peck, is the web reporter for Hacked Off and a PhD researcher examining privacy law and public figures. She is @nataliepeck on Twitter.