A lawyer who acted for News International (NI) over phone-hacking claims has told MPs he knew the company had misled parliament about the affair but he had not spoken up because of client confidentiality.

Julian Pike, a partner at Farrer & Co, the law firm whose clients include the Queen, told MPs on the Commons culture, media and sport select committee on Wednesday that he was aware the company's often-repeated "rogue reporter" defence was untrue.

Pike said he had seen evidence in 2008 that suggested there was "a powerful case" that an additional three News of the World journalists were "illegally accessing information in order to obtain stories" and had informed NI of this.

When asked by Labour MP Paul Farrelly how he would feel about newspaper headlines that might read "Queen's solicitors knew News of the World was lying and did nothing about it", Pike replied: "That sort of headline is obviously not ideal." But he insisted that Farrer & Co was not part of a cover-up and denied he was embarrassed professionally by his decision to stay silent.

In evidence to MPs on the committee two years ago and in 2007 NI executives said phone hacking was the work of a single journalist, former royal editor Clive Goodman. It has emerged since then that the practice was more widespread.

Pike also told MPs that former News of the World editor Colin Myler had met with James Murdoch, who is now deputy chief operation officer of News Corp, in May 2008 to discuss a phone-hacking claim brought by Gordon Taylor, chief executive of the Professional Footballers' Association.

It is the first time that a second meeting to discuss a possible payment to Taylor has been referred to.

MPs were told in July that Myler and Tom Crone, the News of the World's former head of legal, met with Murdoch on June 10 2008, after which Murdoch authorised a payment to Taylor of £425,000 plus costs to settle the claim.

But Pike said Myler also met James Murdoch on 27 May 2008 after fresh evidence had emerged in the Taylor case that suggested hacking at the News of the World went beyond Goodman.

Pike represented the News of the World's former owner during its negotiations with Taylor, who was suing for breach of privacy, in 2007 and 2008.

He said he had been emailed a copy of a briefing document prepared by Crone for Myler ahead of the 27 May meeting, which made it clear that more News of the World journalists had been implicated and recommended the case should be settled.

It is understood that Murdoch has said he has no recollection of that meeting. But he is certain to be quizzed about it when he appears before the same committee for a second time next month. The subject could also come up in Friday's News Corporation annual general meeting, at which a group unhappy shareholders are expected to voice concerns at the way the hacking crisis was handled.

Murdoch has been recalled because his evidence in July directly contradicts that given by Myler and Crone. The two former News of the World executives claim they told Murdoch about the existence of an email sent by a journalist at the paper "for Neville".

It is believed to have been sent to Neville Thurlbeck, who was the paper's chief reporter, and contained transcripts of messages left on Taylor's mobile phone. Murdoch denies he was told about the email.

Pike said in his evidence on Wednesday that the briefing document sent before the earlier meeting in May did not make a direct reference to the "for Neville" email.

He condeded that "he hadn't done very much" after he realised News International had misled Parliament. Asked why the firm did not drop NI as a client or tell the authorities about the extent of the criminal activity at the group, Pike said. "We have obligations to the client we work for." He added: "I don't think it's caused me any professional embarrassment."

In July 2009, News of the World editor Colin Myler told the culture select committee that an email trawl had recovered no evidence that hacking went beyond a single reporter.

Former NI chairman Les Hinton, who will be questioned once again by the committee next week via satellite link, also told MPs that hacking was the work of a single reporter in evidence in March 2007.

Farrer & Co acted for NI subsidiary News Group Newspapers, which published the News of the World, in the numerous legal cases being brought by hacking victims in the high court until last week, when it was replaced by rival firm Olswang.

Taylor's lawyer Mark Lewis, also appearing before the culture select committee on Wednesday, said he been told by Pike that the Taylor case was being handled by Murdoch.

He claimed that Murdoch knew all the details of Taylor's claim. "Mr Murdoch would like you to believe he is mildly incompetent," Lewis said. In fact, he added, Murdoch had been "wildly dishonest".

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