Rebekah Brooks, editor of the Sun and the News of the World, said that she had approved such payments about six times between becoming a deputy editor in 1998 and resigning as an editor in 2009.
But she said that would only authorise such payments rarely.
And she denied that she knew that thousands of pounds of cash she approved for a military contact were going to a top civil servant.
Mrs Brooks, who edited the Sun between 2003 and 2009, told the Old Bailey: “My view at the time was that there had to be an overwhelming public interest to justify payment in those very narrow circumstances of a public official being paid for information in line with their job.”
At the phone hacking trial she faces a charge of conspiring to commit misconduct in public office for approving £40,000 which ended up in the pocket of Ministry of Defence official Bettina Jordan-Barber.
A Sun reporter sent Mrs Brooks 11 emails requesting payments to be made to his “top military contact” via branches of the Thomas Cook travel agency. The money was paid to Jordan-Barber.
Asked by her counsel Jonathan Laidlaw QC if she had known the identity of the reporter’s source, Mrs Brooks replied: “I didn’t know who Bettina Jordan-Barber was.”
Mr Laidlaw asked: “Although you didn’t know the name, did you know that the source was a public official?”, to which she replied: “No.”
Mrs Brooks told the court that she had in certain circumstances approved payments to public officials during her time as an executive at Mr Murdoch’s UK newspaper group News International.
“Probably since I was deputy editor of the Sun in 1998, to 2009, a handful occasions, perhaps half a dozen.”
But she stressed: “If there wasn’t a public interest defence then it’s not done, because it was considered illegal if you did not have a public interest defence.”
She said of the “experienced” reporter who requested the payments: “He never told me about his confidential sources. Most reporters keep their cards close to their chest.”
Taking the stand for the sixth day, Mrs Brooks outlined her busy days editing the Sun, saying that she often worked six days a week and would hold business meetings after the paper’s first edition went off stone at 8pm.
She said she received “hundreds” of emails a day and often had to oversee the paper’s multi-million pound marketing and advertising budgets as well as hold meetings with big advertisers, politicians, generals, admirals and senior police officers.
She ran through a folder of her big stories and campaigns at the Sun, including those for Help for Heroes, the Police Bravery Awards and a campaign against domestic violence.
She also admitted making “lots of mistakes” at the Sun, including the front-page which reported the sectioning of the boxer Frank Bruno with the headline “Bonkers Bruno Locked Up” (“It was a terrible mistake I made”), the hounding of a social worker over the death of Baby P (“all balance went out the window”) and the headline “Ship, Ship, Hooray” about the death of Harold Shipman (“He was a serial killer, but it was in bad taste”.)
She also expressed regret about the treatment meted out to the Labour MP Clare Short in response to her campaign to ban topless models on Page 3. Mrs Brooks said: “This was one when again the reaction of the paper – I am the editor and it was my responsibility – was I would say cruel and harsh.”
She told the jury: “We did it in the heat of the moment… you know, hands off our Page 3. Again, it was just too personal and just wrong.”
Mrs Brooks later told the Court that the Sun never received any complaints about stories for which a Ministry of Defence official received payments.
In her defence against a charge that she conspired to commit misconduct in public office, Mrs Brooks said that she was unaware £40,000 a reporter had requested for a source was going to Bettina Jordan-Barber.
As she continued her evidence at the Old Bailey, the former Sun editor said the reporter who requested the money for his “top military contact” was experienced and trusted.
Saying the reporter was a “story machine,” she told the court: “I’m not policing him.”
She added that the Ministry of Defence had confirmed the details of all his articles in question, adding: “There were never any complaints about where he was getting his stories.”
“We never received any complaints from the Ministry if Defence or anyone in the military.”
Mrs Brooks – who while at News International authorised payments to public officials on a handful of occasions where there was “overwhelming public interest”, she told the court earlier today – said there could have been several different sources for the stories.
She and six other defendants including former News of the World editor Andy Coulson deny all the charges they face. The trial, which is expected to last until mid-May, continues.