Until last week, Charlotte Church was preparing for her latest performance in London. Two American presidents have watched and listened to her in the White House. A pope has heard her sing. She'll be in Downing Street for a St David's Day bash tomorrow. But she had been getting ready for a far more traumatic appearance: giving evidence against Rupert Murdoch's News International in a High Court trial.

That case, which was supposed to begin this week, was only averted after an 11th-hour deal with Mr Murdoch's lawyers which saw the company apologise for years of harassment and intrusive surveillance that contributed to her mother's suicide attempt and repeated self-harm. Mrs Church was then bullied into revealing the full details of those incidents to the News of the World.

But News International is not really apologetic, Charlotte Church says. "In my opinion, they are not truly sorry, only sorry they got caught."

She knows this, she says, because of the tactics used by News International's lawyers in the run-up to the trial as they fought to settle out of court and prevent the airing of Wapping's dirty laundry in public.

"We saw it in the pre-trial discussion," she explains in an interview with The Independent. "There was a horrifying moment when we realised their trial strategy: that they were going to go after the most vulnerable person – my mother.

"They were going to put her through the indignity of repeated psychological evaluation, make her go back in time, relive everything.

"They wanted to sit with my mother going over stuff that happened six years ago. And that was supposed to deliver legal information they were looking for? It was a total bullshit exercise."

She adds: "If we'd gone to trial, they were never going to make it about hacking. They were going to make it about everything else. Divide and conquer, weaken our position and do exactly as they'd done to us before."

For four years between 2002 and 2006, at the height of the News of the World's illegal operations, Charlotte Church was a favourite tabloid target. From a media baptism as the operatic voice of an angel, singing "Pie Jesu" to command, the Welsh teenager and her family turned into a News of the World secret project, capable of generating sales-boosting headlines on everything from a pushy, greedy mother to an out-of-control, boozing, smoking wild child.

"There must have been 700 articles we looked at," she says. "From the internal News International documents that were disclosed to us [as part of the recent legal process] we saw the way they spoke of me and my family. They totally dehumanised us. We were fictional, soap opera characters."

Hacking the mobile phones of Church, her family, her friends and anyone else close to her and operating a surveillance project that some intelligence services would have taken pride in, News International's operatives invaded the privacy of those close to her to an extent that Church herself is only now beginning to appreciate.

At her home in the countryside near Cardiff, sitting, knees to her chin, on a window ledge in the small annexe that became the headquarters of her fight against the Murdoch empire, there's a clarity about what NI did to her: turning her against her closest friends, whom she thought must be selling stories to the tabloid.

"When the negative stuff started, you began looking at everyone. The thing is I'm quite a discreet person. I don't go round talking about my business. I knocked around with just a few people. So I pointed the blame at some people – which [I] know now was unfair." She echoes the remorseful experiences of other hacking victims like Sienna Millar and Paul Gascoigne.

"I've gone round and tried to apologise," says Church. "I saw one of my old friends recently. There was a group of us girls, I just cut them all off, apart from two. I saw this one girl not so long ago and she was crying in front of me, saying 'I really missed you. You were one of my best friends and I couldn't believe you'd do something like that.' I said: 'I'm sorry, I'm sorry I made you feel like that.'"

With an angelic voice and a pure image, Church was tabloid gold – an image that could be built up, but better brought low. The irony was that after merrily hacking her family the NOTW news desk found that the reality wasn't interesting enough for them.

"Just after I'd sacked my first manager they really went for my mother. She was being headlined as 'The Welsh Dragon'," says Church. "They were saying my mother was greedy, pushy, after my money. And she wasn't at all. She was there absorbing all the pressure."

The stories generated a paranoia inside the Church family. "At the time I used to think 'Christ, they've bugged the house, the car. How are they getting this stuff?'

"It often felt like there was a permanent encampment surrounding us. That we were constantly being watched. It wasn't accidental intelligence they had, because there was hardly an issue of the NOTW over those years that didn't have a story about me in it."

Officers from the Metropolitan Police's new phone-hacking investigation contacted Church last September. Her name, and those of her family, her friends, her managers and her advisers, were all across pages of Glenn Mulcaire's notebooks – and had been there since the police first took possession of them in 2006. The invasion of privacy that she had suspected, but could never accept, was confirmed.

To take on NI, she and her manager John Vernile began reconstructing her life during the height of the NOTW's illegal hacking adventures. "It wasn't easy," she says. "Everything changes: telephone numbers change, people change. For instance, my grandfather found an old jacket in his garden shed and there was an old Filofax in one of the pockets. He was able to give me numbers I'd forgotten about." Articles that had been dumped from her memory, and the pain that accompanied them, were exhumed. "I found it really hard going through the evidence. Seeing how these complete strangers, these reporters, people you've never met or seen, seemed so heavily involved in my life."

The legal fight that lay ahead initially looked impossible. "I struggled with the overall injustice of it all. I was going to go to trial as an individual against a global corporation – and everything seemed so weighted in favour of the corporation. Look, I'm just a singer."

But as the trial date got nearer and nearer, Church and her lawyers discovered the unexpected courtroom tactics that would be deployed by NI's counsel: to focus on her mother. It was this realisation that Maria Church's mental health was again on the line, just as it was when she attempted suicide after a NOTW article revealed her husband's infidelity, that caused Charlotte to halt her battle against Murdoch and settle out of court yesterday – for £600,000 in damages.

"The trial was never about money and became increasingly less so," she says. "I almost felt a responsibility as a citizen that I had to go through with it.

"I wanted everyone to know as much as possible about their wrongdoing. And I wanted the process to be made easier for those who came after me.

"I wanted this to go the whole way. But it was made impossible at the end in terms of the collateral damage and what they were going to put my mother and my family through."

Mr Vernile, her former development manager at Sony Records and now her manager, shares Church's anger. "You can understand the proper journalism of investigating criminals, people who've done something wrong," he says. "But that's what these rats were hiding behind. Proper journalism needs a mechanism to protect sources, to be aggressive, and to bend the rules to get to the truth. But they were using that same protection to conduct this vivisection of private individuals."

He adds: "The only analogy I can think of is organised crime. They wanted to get to Charlotte, but they never targeted her: they went for her driver, her friends, her manager, her family – everyone around her."

The legally enforced disclosure of documents that came out of News International, which the Met then passed on to Church's lawyers, offered a disturbing insight into what the NOTW would do to keep Church in the headlines. Folders of internal News International memos and emails line a bookshelf at Church HQ.

Mr Vernile says: "From the memos that came from inside the NOTW we learned who was watching us, and who inside the company was told. We saw the traffic between reporters, the newsdesk editors, features, finance people, lawyers, and others. It was a community, people from different departments, all communicating with each other."

He adds: "The memos we saw painted a picture of an internal culture. Then in court [at the pre-trial meetings] you see their resources: 25 lawyers all trying to bury you. So you need to up your game. With all those lawyers you know they are serious. But if they have that many people in one room, you know they are worried. And if they are worried they have something to hide. We thought – we can figure this out."

For Church, the legal fight halted parts of her life that she treasures. The recording studio recently built under the annexe went silent. "All our lives have been on hold, our music, our recording project," she says, "everything was on hold fighting this."

She adds: "That my family have come through this, weathered it – that's a testament to us, our strength, rather than them simply saying we weren't treated that badly."