The News of the World had a source who was "well placed in royal circles" who was paid in cash for providing information, the jury in the phone-hacking trial heard yesterday.

The disclosure came on a day of glimpses behind the scenes of a tabloid newspaper when the court also heard of voicemail messages being handed over by kiss-and-tell sources, Heather Mills being taped while talking to a prostitute and the paper publishing "spoof editions" to mislead rival titles.

Emma Harvey, who was Andy Coulson's PA when he was deputy editor of the News of the World, told the court that she was aware of cash being paid to the royal source. But Timothy Langdale QC, for Coulson, said he would not be naming the person.

Harvey said she had never been aware of any phone hacking at the paper. Coulson had asked her to transcribe a tape recording of Mills, the former wife of Paul McCartney, talking to a prostitute but that had been recorded by the prostitute, she said.

The paper's former night editor, Harry Scott, was shown two internal emails written by a senior journalist about an alleged orgy involving actors from the BBC drama EastEnders. One referred to a request for an actor's voicemail and text messages. The other said: "Getting all texts pictured and have voicemail messages on tape... The texts and voicemail provide proof."

Scott told the court: "That's not phone hacking. That's the person who is giving the kiss-and-tell either giving the paper their home phone answer messages or putting in a call to the person who is the subject of the story and taping it."

He said that references to voicemail in a published story about Milly Dowler would not have made him suspect that the paper had hacked her phone. Reading it now, he said, he would have guessed that the information had come from police sources.

Revealing something of the newspaper's tradecraft, Scott said the paper sometimes published a "spoof" first edition which would be sold on the streets of London, with "disposable garbage' on its front page, in order to conceal from rivals an exclusive front page story which was printed in the real first edition and loaded on to trains. The spoof story would have to be true and strong, he added. "If you produce a story about Jackanory on the front page, it's obviously a spoof."

During the day, former News of the World staff gave differing accounts of their awareness of Glenn Mulcaire, who has pleaded guilty to hacking phones for the paper. The court has been told that neither Rebekah Brooks nor Andy Coulson had heard his name while they worked at the News of the World.

The jury were shown a story which had been published in the paper in August 2002, which described how Mulcaire had played a game as striker for AFC Wimbledon and which described him in print as "part of our special investigations team." Geoff Sweet, a sports journalist on the paper, who wrote the story, was asked how he knew that. He replied: "I was part of the News of the World empire, and it was just generally known."

Cross-examined on behalf of Rebekah Brooks and Coulson, Sweet said he could not name any person who had told him about Mulcaire, that he could not remember writing the story and that the line about Mulcaire's work for the paper "may have been put in by the sports desk to add a bit of kudos to the story".

But Harvey and Scott said they had not heard Mulcaire's name until he was arrested in 2006. The newsdesk secretary, Frances Carman, said she remembered that "a man called Glenn used to call up from time to time asking to speak to people on the desk."

Brooks, Coulson, Stuart Kuttner and Ian Edmondson deny conspiring to intercept communications. The trial continues.