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.
Rebekah Brooks has denied being told while on holiday that News of the World staff thought Milly Dowler was alive and working in a factory.
No-one at the newspaper told her that they believed that the 13-year-old was employed in Telford, the former editor told the Old Bailey.
The court had already heard that the false lead was garnered from the hacking of the missing schoolgirl's voicemails by private investigator Glenn Mulcaire, who was working on behalf of journalists at the paper.
Brooks, who was on holiday at the time of the perceived discovery, said an operation to find the teenager by members of the paper's staff had not been disclosed to her.
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.