Starting his evidence after sitting in the dock for the six month case, Mr Coulson said that when he was promoted to NoW deputy editor in 2000 he encountered a very different newspaper to its daily stablemate the Sun, where he had spent almost all his career.
While “fantastic and fantastically hard working,” News of the World’s journalists were riven by conflict and more secretive than usual, adding: “People held their contacts even closer to their chest.”
Mr Coulson told the Old Bailey that contacts were the important thing for any journalist.
He denies conspiring to hack phones – a charge admitted by three NoW news editors who worked for him, Neville Thurlbeck, James Weatherup and Greg Miskiw, who pleaded guilty.
He also denies conspiring to commit misconduct in public office relating to alleged payments to police officers guarding the royal family.
Going into more detail about the NoW when he was promoted to deputy editor under Rebekah Brooks, Mr Coulson said that staff there were very aware that several editors had come and gone in a short period of time. He said:
“I think there was certainly an atmosphere that perhaps this regime wouldn’t last particularly long… There were a number of people who had been on the paper for a long time who certainly had that view and as a result were perhaps a little bit more distant.”
Mr Coulson said that at the Sunday paper there was more time to develop and plan stories than at the Sun, where he had been a member of staff between 1989 and 1999 – and also more time for egos and rivalry.
He told the court:
“The first thing that surprised me was the degree of internal competition between news and features. It had become, frankly, destructive. It seemed crazy that news and features were actively working against each other.”
He and Mrs Brooks had tried to reduce the rivalry, while keeping the departments performing at their peak, telling the court: “You had to find the balance.”
He lavished praise on his co-defendant and former lover, Mrs Brooks.
“Rebekah was and is a very good journalist,” he said.
“She was, I thought, an editor who was very supportive of her staff. She worked very hard and during our time on the News of the World in the early period of our working together she was very heavily focussed on the campaigning side of things.”
Mr Coulson, who resigned as Prime Minister David Cameron’s communications director in January 2011, added: “She felt that the paper needed modernising. That it was old-fashioned in some way.”
Asked by his lawyer Timothy Langdale QC if he had ever used private detectives, Mr Coulson said: “Not that I can remember,” then added “a small caveat”: that some people who he thought of as journalists could also be private investigators.
“It’s a small caveat, but as far as I can remember…” he said.
He said that after he resignation from the News of the World in January 2007, he had only “sparingly” met Rupert Murdoch.
Asked whether he had met him since then, he said: “Yes, sparingly and I think almost entirely at social functions, such as his summer party.”
He did not sit in on meetings between David Cameron and Mr Murdoch, though he would greet the newspaper boss before or afterwards.
Asked about his contact with Mr Cameron since resigning in January 2011, Mr Coulson said:
“My family and I spent a weekend with him in the spring  after I left and I haven’t spoken to him since.”
The trial continues.