Princess Diana leaked information about the Prince of Wales to "an ally" in the press in order to "take on" her estranged husband, former News of the World reporter Clive Goodman told the phone hacking trial.
Former News of the World editor Rebekah Brooks knew nothing about a contract the newspaper had with private investigator Glenn Mulcaire, she has told the Old Bailey.
Asked by her lawyer if she knew anything about the £92,000 a-year contract, she said:
Brooks admitted that, as editor, an expense as big as that should have been run past her for approval. The court has heard it is claimed that the contract was organised by former news editor Greg Miskiw, who has pleaded guilty to conspiring to hack phones.
Brooks said he "sign-off level" for payments was around £50,000 so any authorisation for something bigger would have to go through her, as well as her then manager Stuart Kuttner.
Read: Brooks denies all knowledge of phone-hacking and Glen Mulcaire
The ex-News of the World chief texted former PM Tony Blair saying she was 'feeling properly terrified' the day before the police interview.
In contrast to yesterday's cool performance, the former editor broke down whilst giving evidence in her phone-hacking trial.
Tony Blair advised Rebekah Brooks how to shield James Murdoch from the fallout of the phone-hacking scandal, the Old Bailey heard today.