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LONDON (Reuters) - An external lawyer for Rupert Murdoch's News Corp told a hearing on Wednesday he did nothing when he realised the company was not telling the truth to parliament over the phone hacking scandal.
Julian Pike said he had been aware in 2008 that the practice of people hacking into phones to secure stories had been more widespread than the company acknowledged.
But he told the Commons culture committee he had "not done very much" to dispute the firm's claims that only one rogue reporter was involved.
He also told the committee he thought James Murdoch had made mistakes in his recollection of what he knew and when regarding the hacking.
Both Rupert and James Murdoch appeared before the Commons Culture Committee in July.
James Murdoch, chairman of the UK newspaper arm, had for years argued that the phone hacking was solely the work of royal reporter Clive Goodman and a private investigator who had already gone to jail.
But Pike said that in 2008 he thought there were three journalists other than Goodman involved in phone hacking.
"They were also advised by counsel and ourselves that there was a powerful case to support a culture of illegal accessing of information to get stories," he added.
Since it became clear that the criminal activity went much further, the investigation has centred on an email which was obtained by a hacking victim, soccer executive Gordon Taylor, and which contained transcripts of intercepted voicemails unrelated to the activities of Goodman.
Pike said the email in 2008 clearly showed there was a wider problem with phone hacking than had been acknowledged. He said the company then negotiated to settle with Taylor and that James Murdoch had been involved in that process.
He said James Murdoch was originally briefed on the situation in May by the paper's then editor and not in June, which James Murdoch had originally told the committee.
He had also told the internal lawyer at the time that he thought three journalists were involved in hacking.
The allegations of hacking, which had been circulating for two years, fully erupted in July this year when it emerged that people working for the News of the World tabloid had hacked the phones of thousands, ranging from celebrities to crime victims, in search of exclusive stories.
News Corp closed the 168-year-old paper at the height of the drama and pulled its highly prized $12 billion (7.6 billion pound) bid for pay-TV group BSkyB as politicians in the country turned on News Corp and its long-held influence in Britain.
Nearly 20 journalists and executives have since been arrested over the scandal.
James Murdoch has denied knowing about the hacking but he has been criticised for his handling of the fallout and analysts believe his chances of one day replacing his father at the top of the company have been damaged by the affair.
Pike worked for Farrer & Co, known as the Queen's solicitors, who had been advising the News of the World on its handling of the affair and the many civil cases it was facing, until the two sides announced they had parted company earlier this month.
In a second hearing, Mark Lewis, the lawyer who has represented many of the victims, said News Corp had hugely overpaid in the Taylor case as it fought to keep the illegal activity out of the public domain.
He also said he was working on a lawsuit in the United States because some of the victims had their phones hacked when they were in the U.S.
Editing by Steve Addison