LONDON (Reuters) - Andy Coulson, Prime Minister David Cameron's ex-media chief, agreed to have the phones of royal aides monitored and saw transcripts of hacked voicemails when he was editing a Rupert Murdoch tabloid, a former reporter said on Tuesday.
Clive Goodman, the ex-royal editor of Murdoch's now defunct News of the World tabloid, told a London court Coulson had approved a 500 pound ($830) weekly payment to a private detective who later hacked phones of staff working for The Queen's grandsons.
Goodman also told the court he had shown Coulson full transcripts of hacked messages and told him how private investigator Glenn Mulcaire could supply the numbers needed to access voicemails.
The former reporter, 56, and Mulcaire were both jailed in 2007 for hacking the phones of the senior royal aides.
Coulson, 46, who edited the tabloid at the centre of a phone-hacking scandal for four years, has always denied any knowledge of the practice.
He joined Cameron's office after leaving the newspaper, working for the Conservative leader who became prime minister in May 2010. Coulson resigned in January 2011 due to escalating coverage of the phone-hacking scandal which led Murdoch to close the paper and sent shockwaves through the British establishment.
Goodman told London's Old Bailey court the deal to monitor the phones of senior aides to Prince William and his brother Harry was agreed at a meeting he had with Coulson at the end of 2005. He said he needed the editor's approval as he had no budget from which to make the payments.
"I said that ... Glenn Mulcaire had offered to monitor three royal phones for us," said Goodman. "We could monitor them or he could monitor them for 500 pounds a week. The editor agreed to a two-month trial."
Goodman said the trial was extended and payments continued on an ad-hoc basis until both he and Mulcaire were arrested in August 2006.
Under the deal, Mulcaire, who had suggested to him that the information about voicemails had come from British security services who were already monitoring the royal family's phones, received 12,300 pounds.
The jury were shown emails and stories about the princes which came from hacking either the royal aides' phones or even members of the royal family themselves. The court heard that a recording of a voicemail left by Prince William for his now-wife Kate Middleton was found at Goodman's house which he said had been made by Mulcaire.
Goodman said he also showed Coulson a transcript of a voicemail left on the aide's phone he had recorded and the jury heard email exchanges between the two discussing the story.
"As we know it's 100 percent fact," Goodman said in one email to Coulson.
In another email, Goodman wrote to Coulson that the source for a story about Middleton was "that fellow who used to be on a monthly retainer for us, rock solid".
"Does rock solid mean the product of voicemail interception?" his lawyer David Spens said to him. "Yes it does," Goodman replied.
Goodman also told the court senior journalists working on the paper were involved in hacking on an industrial scale.
One journalist regularly hacked Coulson's phone first thing in the morning to find out about other reporters' stories and also targeted Rebekah Brooks, then editor of Murdoch's rival Sun newspaper, to find out what her paper was planning.
The trial has already heard that three senior former News of the World journalists have admitted conspiracy to hack phones.
Another junior reporter, who has admitted the same offence, has also told the jury Coulson knew he had been hacking the phones of celebrities while working for the paper. Coulson's lawyer said the reporter had made up the claims to try to make a deal with the authorities to avoid prosecution.
Both Goodman and Coulson are on trial accused over alleged illegal payments. Coulson and Brooks, who went on to become chief executive of News Corp.'s British newspaper arm, are also accused of conspiring to illegally access the voicemails of mobile phones.
Four others are also on trial and they all deny the charges. The trial continues.
($1 = 0.6008 British Pounds)
Editing by Belinda Goldsmith and Gareth Jones