Mr Goodman said that he and Mr Coulson had been friends for years, with each attending each other’s wedding, but added that Mr Coulson had become aggressive after becoming editor in 2003.
Mr Coulson’s behaviour was made worse by the arrival of his new deputy editor, former People editor Neil Wallis, Mr Goodman said.
Describing a hyper-competitive, backstabbing culture under Mr Coulson’s editorship, Mr Goodman told the Old Bailey: “My relationship with him changed, and he became more aggressive, more combative and more bullying.”
In wide-ranging testimony about his 20 years at the NoW, Mr Goodman denied he had paid palace police officers to obtain three royal phone directories found at his home by detectives.
He also told the court that Princess Diana had posted him one of the 15 directories he had in his possession in total as part of an attempt by her “to show the forces ranged against her” in her battle with Prince Charles.
After being jailed for four months in 2007 for eavesdropping voicemails of the Royal Household while at the NoW, Mr Goodman took the rap as the lone “rogue reporter” who had hacked phones.
Breaking his seven-year silence at the hacking trial this afternoon, he was asked by his counsel, David Spens, QC, how he had got on with leading figures at the NoW.
Rebekah Brooks (then Wade), Mr Goodman said, was “co-operative, willing to listen, said what she wanted, not interested in getting into feuds or spats.”
By contrast, his relationship with Mr Coulson became strained where once it had been good. They had shared a mutual friend, reporter Chris Blythe, but on becoming editor Mr Coulson had progressively demoted him from being someone who would present his stories third or fourth at the NoW news conference to last – or not at all.
“He was aggressive,” Mr Goodman told the court.
“He demoted me down the list and then took me off the list altogether. I was forever being berated about the quality of my stories.”
He added: “It sounds quite petty, but it was meant to degrade you in the eyes of others.”
Asked by his counsel “Was there any sign of sentimentality?”, Mr Goodman replied: “Not much, really. One of his best friends, Sean Hoare, had worked as a showbusiness reporter, and when Sean became a difficult person to work with in the office he was pretty much sacked.”
Asked about deputy editor Neil Wallis, Mr Goodman said: “He was old school. He shouted all the time. He was very aggressive – that was pretty much the Neil Wallis approach to journalism full stop.”
Mr Wallis had spent most of his career at daily newspapers and “didn’t like people planning…”, he wanted “action, action, action” all the time, Mr Goodman complained.
He told the court: “He didn’t like me. He didn’t like what I did and he made it his business to tell everyone what he thought of me.”
“On Sunday papers, stories are driven by contacts,” he added.
“People you know who will provide you information. They’re not provided by running around like a headless chicken. So we had a clash of cultures.”
The NoW’s managing editor, Stuart Kuttner, he said, would “arbitrarily” cut payments that he had agreed with his sources.
“He was difficult, but not just with me,” Mr Goodman said.
“His responsibility as managing editor was to look after the budget. There are lots of ways of doing that. His way was simply to cut the amount of money we were paying for stories.”
The paper between 2003 and 2006 was “extraordinary competitive, quite bullying, menacing,” Mr Goodman said, and that culture was encouraged “by Neil and by Andy”.
He told the court one executive sabotaged a scoop by the “Fake Sheikh” Mazher Mahmood to prevent him getting a front-page splash.
On hearing that Mr Mahmood was about to expose a well-known model for becoming a prostitute, he said, the executive tipped off the model’s agent about a forthcoming meeting “and it never took place.”
Another executive, on learning that Mr Goodman was considering taking a job with a Mirror title, ordered a private detective from the Southern Investigations agency to follow him to a meeting with a top contact, he said.
The plan was that after following Mr Goodman to the meeting, the detective would then follow the contact after it to establish his identity. If Mr Goodman had left the NoW, the executive, he surmised, planned to “blackmail the contact to continue working for the NoW” or to blow his cover so that he would no longer give information to anyone.
He told the court he discovered this by chance when he happened to pass by the executive’s computer and read about the incident.
Turning to the royal phone directories found at his home in Putney by detectives in 2006, Mr Goodman said that he used them to contact royal staff about stories.
He gave six examples when this had happened, such as when a disgruntled fireman had flown the Union flag at half-mast on top of Buckingham Palace in the days after Princess Diana’s death in 1997 and when an intruder dressed as Osama Bin Laden had gatecrashed Prince William’s 25th birthday party in 2003.
He told the jury he had received copies of two royal phone directories in 1998 and 1993 from a senior valet to the Prince of Wales, whom he named as Kenneth Stronnach. Mr Stronnach, he said, was “thoroughly fed up with working for the Royal Family – and the Prince of Wales in particular.”
Mr Goodman also said had that Princess Diana had sent him a 1992 copy of the Green Book directory listing phone numbers and addresses for senior members of the Royal Household.
He told the court an envelope had arrived at the front gate of the NoW’s offices in Wapping bearing his name. Mr Spens asked: “After it arrived, did you receive any phone call about it?”, to which Mr Goodman replied: “Yes, from the Princess, asking whether I received it.”
Asked why she had sent it to him, Mr Goodman explained: “She was going through a very difficult time. She told me she wanted to me to see this document because she wanted me to see the scale of her husband’s household compared to hers.”
He went on: “She was in a very bitter situation with the Prince of Wales at the time, and she felt she was being swamped by the people close to his household. She was looking for an ally to take him on, to show the forces that were ranged against her.”
Asked if any of the 15 phone directories had been supplied to him by police officers, he replied: “None.”
Had he ever received information from a royal protection officer? “No,” he said.
Mr Goodman, who denies conspiring to commit misconduct in a public office, continues giving evidence tomorrow.
Mrs Brooks, NoW editor between 2000 and 2003, Mr Coulson editor between 2003 and 2007, and Mr Kuttner deny conspiring to hack phone messages.