LONDON (Reuters) - Prime Minister David Cameron's former spin doctor and a friend who was a top executive in Rupert Murdoch's media empire face phone hacking charges, prosecutors said on Tuesday, a twist that may expose Cameron to more awkward questions about his judgment.
In a decision that opens the door to a politically-charged court case, prosecutors said they had brought charges against Andy Coulson, Cameron's former communications director, and would charge Rebekah Brooks, who oversaw Murdoch's News International and who remains a close friend of the prime minister, at a later date.
"There is sufficient evidence for there to be a realistic prospect of conviction in relation to one or more offences," said Alison Levitt, Principal Legal Adviser to the Director of Public Prosecutions.
"I have concluded that a prosecution is required in the public interest."
The alleged offences were committed between 2000 and 2006 when both Coulson and Brooks served as editor of the News of the World, the salacious Sunday tabloid which Murdoch was forced to close a year ago amid public disgust at the phone hacking revelations.
If found guilty, the maximum penalty is two years in prison and/or a fine.
Among the alleged victims were two former home secretaries (interior ministers), former England football manager Sven-Goran Eriksson, Hollywood stars Angelina Jolie and Brad Pitt, former Beatle Paul McCartney and a minor member of the royal family.
Analysts and opposition lawmakers said Cameron's political reputation would be in the dock too at a time when his coalition government is struggling to kick-start an economic recovery and retain public trust.
"My view is that what happens to Andy Coulson and Rebekah Brooks reflects on David Cameron's judgment in both the appointment of Coulson and in being seen to be so close to a certain newspaper empire," Paul Farrelly, an opposition Labour lawmaker, told Reuters.
But though the trial was likely to inflict political damage on Cameron it was unlikely to be fatal to his premiership whose chances of survival depended more on the health of the British economy, Farrelly added.
Six other people, including some of the most senior former staff at the News of the World, Britain's biggest-selling Sunday tabloid until it was closed, were charged alongside Coulson on Tuesday. Brooks was not charged as she is due to report to London police in August, part of her bail conditions.
Prosecutors said they were also hoping to reveal the names of more than 600 people who they believe were hacking victims.
The eight defendants will appear at a magistrates court for a preliminary hearing on August 16.
Brooks and Coulson are also both accused of involvement in hacking the telephone of Milly Dowler, a missing schoolgirl who was later found murdered in 2002.
It was the revelation that News of the World journalists had hacked her phone, giving her parents false hope that she was alive, which triggered a furore that engulfed Murdoch's News International and led to the closure of the 168-year-old paper.
Both Brooks and Coulson said they would fight the allegations, and specifically denied any wrongdoing over Dowler.
"Anyone who knows me or has worked with me will know that I wouldn't - more importantly that I didn't - do anything to damage the Milly Dowler investigation," Coulson said outside his house in south London surrounded by photographers and media.
"At the News of the World we worked on behalf of the victims of crime, particularly violent crime, and the idea that I would then sit in my office dreaming up schemes to undermine investigations is simply untrue."
In her statement, Brooks, a close confidante of Murdoch, said she did not authorise, nor was aware of phone hacking.
"The charge concerning Milly Dowler is particularly upsetting not only as it is untrue but also because I have spent my journalistic career campaigning for victims of crime. I will vigorously defend these allegations," she said.
Brooks, her husband and her personal staff have already been charged with attempting to pervert the course of justice, while Coulson has separately been charged with perjury after he denied any knowledge of phone hacking in an unrelated Scottish court case.
Coulson resigned from the News of the World following the 2007 convictions, and took up the role as director of communications of Cameron's Conservative Party, helping to shape his campaign to become prime minister.
Critics say Cameron appointed Coulson in order to secure the backing of the journalist's former boss, Murdoch, and say the appointment showed a shocking lack of judgment.
Brooks, instantly recognisable by her long, curly red hair, was close to Cameron, socialising with him over Christmas breaks, and both were embarrassed when an inquiry into media ethics read out text messages sent between the two.
Cameron used to sign his frequent text messages to Brooks with an affectionate "LOL", which he thought stood for "lots of love". She quit her News International job at the height of the furore last July when the Dowler hacking was revealed.
Tuesday's decision to press charges is far from the end of the matter. Police have two other ongoing inquiries examining allegations that journalists hacked into computers and made corrupt payments to public officials in return for information.
Almost 50 arrests have been made as part of those inquiries which the detective in charge said on Monday had spread to include journalists from other newspaper publishers.