Sara Payne, whose eight-year-old daughter Sarah was abducted and murdered in July 2000, has been told by Scotland Yard that they have found evidence to suggest she was targeted by the News of the World's investigator Glenn Mulcaire, who specialised in hacking voicemail.

Police had earlier told her correctly that her name was not among those recorded in Mulcaire's notes, but on Tuesday officers from Operation Weeting told her they had found her personal details among the investigator's notes. These had previously been thought to refer to a different target.

Friends of Payne have told the Guardian that she is "absolutely devastated and deeply disappointed" at the disclosure. Her cause had been championed by the News of the World, and in particular by its former editor, Rebekah Brooks. Believing that she had not been a target for hacking, Payne wrote a farewell column for the paper's final edition on 10 July, referring to its staff as "my good and trusted friends".

The evidence that police have found in Mulcaire's notes is believed to relate to a phone given to Payne by Brooks to help her stay in touch with her supporters.

On Thursday night Brooks insisted the phone had not been a personal gift but had been provided to Payne by the News of the World "for the benefit of the campaign for Sarah's law".

In a statement, Brooks said the latest allegations were "abhorrent" and "particularly upsetting" because Sara Payne was a "dear friend".

Responding earlier to news that Payne's details had been found in Mulcaire's notes, one of Payne's close colleagues said: "We are all appalled and disgusted. Sara is in bits about it." It is not known whether any messages for Payne were successfully hacked by Mulcaire.

Coming after the disclosure that the News of the World hacked and deleted the voicemail of the murdered Surrey schoolgirl Milly Dowler, the news will raise further questions about whether News Corporation is "fit and proper" to own TV licences and its 39% share of BSkyB.

It will also revive speculation about any possible role in phone hacking of Brooks, who was personally very closely involved in covering the aftermath of Sarah Payne's murder and has always denied any knowledge of voicemail interception. On 15 July Brooks resigned as chief executive of News International and was arrested and interviewed by police.

The Labour MP Tom Watson, who has been an outspoken critic of News International, said of the Payne allegation: "This is a new low. The last edition of the News of the World made great play of the paper's relationship with the Payne family. Brooks talked about it at the committee inquiry. Now this. I have nothing but contempt for the people that did this."

Friends of Payne said she had accepted the News of the World as a friend and ally. Journalists from the paper attended the funerals of her mother and father and visited her sick bed after she suffered a severe stroke in December 2009.

In the wake of the Guardian's disclosure on 4 July of the hacking of Milly Dowler's phone [see footnote], there were rumours that Payne also might have been a victim. Police from Operation Weeting, which has been investigating the News of the World's phone hacking since January, checked the names of Payne and her closest associates against its database of all the information contained in the notebooks, computer records and audio tapes seized from Glenn Mulcaire in August 2006. They found nothing.

The News of the World's sister paper, the Sun, was quick to report on its website, on 8 July, that Payne had been told there was no evidence to support the rumours. The next day the Sun quoted her paying tribute to the News of the World, whose closure had been announced by News International. "It's like a friend died. I'm so shocked," she told them.

In the paper's final edition on Sunday 10 July, Payne registered her own anger at the hacking of Milly Dowler's phone: "We have all seen the news this week and the terrible things that have happened, and I have no wish to sweep it under the carpet. Indeed, there were rumours - which turned out to be untrue - that I and my fellow Phoenix charity chiefs had our phones hacked. But today is a day to reflect, to look back and remember the passing of an old friend, the News of the World."

Since then, detectives from Weeting have searched the Mulcaire database for any reference to mobile phone numbers used by Sara Payne or her closest associates or any other personal details. They are believed to have uncovered notes made by Mulcaire which include some of these details but which had previously been thought to refer to a different target of his hacking. Police have some 11,000 pages of notes which Mulcaire made in the course of intercepting the voicemail of targets chosen by the News of the World.

Friends of Sara Payne said that she had made no decision about whether to sue the paper and that she wanted the police to be able to finish their work before she decided.

Operation Weeting is reviewing all high-profile cases involving the murder, abduction or assault of any child since 2001 in an attempt to find out if any of those involved was the target of phone hacking.

In her statement, Brooks said: "The idea that anyone on the newspaper knew that Sara or the campaign team were targeted by Mr Mulcaire is unthinkable. The idea of her being targeted is beyond my comprehension.

"It is imperative for Sara and the other victims of crime that these allegations are investigated and those culpable brought to justice."

Hayley Barlow, former News of the World PR, said on Twitter on Thursday night that Payne was baffled by the news that Mulcaire had details of her phone "as she didn't even have voicemail on her phone until 2009".

The revelations came as it was announced that James Murdoch had received a ringing endorsement from directors of satellite group BSkyB.

A lengthy board meeting on Thursday at BSkyB ended with unanimous support for Rupert Murdoch's youngest son to continue as chairman of the group following the collapse of his family firm's bid for the 61% of the satellite business it does not already own.

The Hacked Off campaign, which represents phone-hacking victims and is calling for a full public inquiry into the matter, said the Payne allegations indicated "breathtaking hypocrisy and a complete lack of moral sense" on the part of the News of the World.

The Phoenix Chief Advocates, co-run by Payne, said in a statement: "Whilst it was previously confirmed by Operation Weeting that Sara Payne's name was not on private investigator Glenn Mulcaire's list, it has now been confirmed by Operation Weeting that Sara's details are on his list.

"Sara is absolutely devastated by this news, we're all deeply disappointed and are just working to get her through it.

"Sara will continue to work with the proper authorities regarding this matter."

• This article was amended on 28 July 2011. The original version suggested the phone was provided to Sara Payne personally by Rebekah Brooks. A statement from Ms Brooks was added to clarify that the phone was given by the News of the World and was not a personal gift.

• The following was published on 12 December 2011 in the corrections and clarifications column: An article about the investigation into the abduction and death of Milly Dowler (News of the World hacked Milly Dowler's phone during police hunt, 5 July, page 1) stated that voicemail "messages were deleted by [NoW] journalists in the first few days after Milly's disappearance in order to free up space for more messages. As a result friends and relatives of Milly concluded wrongly that she might still be alive." Since this story was published new evidence – as reported in the Guardian of 10 December – has led the Metropolitan police to believe that this was unlikely to have been correct and that while the News of the World hacked Milly Dowler's phone the newspaper is unlikely to have been responsible for the deletion of a set of voicemails from the phone that caused her parents to have false hopes that she was alive, according to a Metropolitan police statement made to the Leveson inquiry on 12 December.