• Metropolitan Police rules out new investigation • News International: 'Confidentiality obligations' prevent comment on 'certain' Guardian allegations • Andy Coulson may face Commons culture select committee • David Cameron defends his communications chief • Gordon Brown: 'This raises serious questions'

The Crown Prosecution Service today said it would undertake an urgent review of evidence in the News of the World phone hacking case, after the Metropolitan Police revealed it did not plan a further investigation of the allegations.

However, Andy Coulson, the former News of the World editor, now the Tory communications chief, could be grilled by MPs for a Commons inquiry into the affair.

Keir Starmer QC, the director of public prosecutions, said he had ordered an "urgent examination" of material provided by the police in the News of the World case three years ago. He added that the process will take time but he hopes to make a further statement in coming days.

"I have no reason to consider that there was anything inappropriate in the prosecutions that were undertaken in this case," Starmer added.

"In the light of the fresh allegations that have been made, some preliminary inquiries have been undertaken and I have now ordered an urgent examination of the material that was supplied to the CPS by the police three years ago.

"I am taking this action to satisfy myself and assure the public that the appropriate actions were taken in relation to that material."

John Yates, the Metropolitan Police's assistant commissioner, said that no further evidence had come to light since Scotland Yard's original investigation, which led to the News of the World's royal editor, Clive Goodman, and a private investigator, Glenn Mulcaire, being jailed for four and six months respectively in January 2007 after they were found guilty of hacking into the mobile phones of royal household staff. Coulson also resigned after Goodman was jailed in January 2007.

Speaking outside Scotland Yard in central London, Yates said he was not involved in the original Mulcaire and Goodman investigation and had reviewed the facts of the case with "an independent mind".

He added that Mulcaire and Goodman targeted potentially "hundreds" of people, but the pair "used the tactic [of phone-hacking] against a … small group of individuals". He said all those individuals were notified that their phones had been targeted. "Where there was tapping they were contacted by police," Yates said.

"In the vast majority of cases [the Met originally looked into] there was insufficient evidence to show that tapping had actually been achieved. No additional evidence has come to light since this [case] was concluded … no further investigation is required."

Yates added that the original investigation had "not uncovered any evidence that John Prescott's phoneline had been tapped".

John Whittingdale MP, the Conservative chair of the Commons culture select committee, said today it was "highly likely" to call Coulson to give evidence as part of an investigation into how journalists at the paper obtained information and whether executives knew about the methods they employed.

The investigation has been prompted by the Guardian's revelations that News Group Newspapers, the News International subsidiary that publishes the Sunday tabloid, has paid a total of £1m in out-of-court settlements to three people whose mobile phones were hacked into. They included Gordon Taylor, the chief executive of the Professional Footballers' Association, who received £700,000.

That has prompted a political storm today, with Home Office minister David Hanson forced to take emergency questions from angry MPs on the matter during a hastily-convened session at the House of Commons this morning.

News of the World parent company News International today broke its silence on the phone-hacking affair, but did not deny any of the Guardian's allegations.

The company said its journalists fully complied with relevant legislation and codes of conduct since February 2007, after the Goodman case and Coulson's resignation, but that it was legally bound to not discuss some of the Guardian's allegations.

"News International is prevented by confidentiality obligations from discussing certain allegations made in the Guardian newspaper today," the company said.

"Since February 2007, News International has continued to work with its journalists and its industry partners to ensure that its journalists fully comply with both the relevant legislation and the rigorous requirements of the PCC's Code of Conduct. At the same time, we will not shirk from vigorously defending our right and proper role to expose wrongdoing in the public interest."

Gordon Brown, the prime minister, has also mentioned the row about phone-hacking today at a press conference in L'Aquila, Italy, where he is attending the G8 summit.

"I am not aware of the details of what is being talked about, other than that there is an issue on this in London," Brown said. "I think this raises questions that are serious and will obviously have to be considered, but I understand that the police are looking at a statement later today and I do not think I should say any more than that."

David Cameron, the Conservative leader, is facing calls for Coulson to quit as his director of communications. This morning Cameron was forced to defend the former News of the World editor, telling reporters outside his home in London: "It's wrong for newspapers to breach people's privacy with no justification. That is why Andy Coulson resigned as editor of the News of the World two and a half years ago.

"Of course I knew about that resignation before offering him the job. But I believe in giving people a second chance. As director of communications for the Conservatives he does an excellent job in a proper, upright way at all times."

Some of the most powerful figures in Rurpert Murdoch's News Corporation media empire will also be asked to give evidence by MPs on the culture select committee when they begin their phone-hacking investigation next Tuesday.

They include Rebekah Wade, the outgoing Sun editor who has been promoted to News International chief executive; Stuart Kuttner, the News of the World's outgoing managing editor; Colin Myler, the current News of the World editor; and Les Hinton, the former chairman of News International.

Whittingdale also said that Nick Davies, the Guardian journalist who broke the story, will be asked to appear at the hearing about the controversy. Coulson will be asked to give evidence after that hearing has taken place.

The select committee quizzed Hinton, who ran Rupert Murdoch's stable of British newspapers until the end of 2007, about phone hacking at the News of the World during an inquiry earlier that year into self-regulation of the press.

That was prompted, in part, by the arrest of former News of the World royal editor Clive Goodman in August 2006 on charges of obtaining information illegally. Goodman was jailed in January 2007, prompting Coulson's resignation.

Two months later, Hinton told MPs on the culture select committee: "I believe that Clive Goodman was the only person who knew what was going on."

Hinton is now based in New York as chief executive of Wall Street Journal owner Dow Jones, part of Murdoch's News Corporation.

The Press Complaints Commission has today said it may reopen its 2007 investigation into phone hacking by newspaper journalists. The PCC also said it would investigate any new allegations about potentially illegal activity "without delay".

Culture secretary Ben Bradshaw has said the affair raises questions for the Tory leader. "David Cameron, the police and the Press Complaints Commission all have questions to answer in relation to today's Guardian revelations," he said in a message posted on Twitter this morning.

The Guardian revealed yesterday that Rupert Murdoch's News Group Newspapers, the News of the World's parent company, has paid out more than £1m to settle legal cases that threatened to reveal evidence of his journalists' repeated involvement in the use of criminal methods to get stories.

Gordon Taylor, the chief executive of the Professional Footballers' Association, received a £700,000 payment from News Group.

The methods used by the News of the World came to light after Goodman was jailed. Coulson was editing the paper at the time and resigned when Goodman was jailed.

News International executives, including Coulson, said they did not know about Goodman's actions and that he was acting alone.

Former home secretary Charles Clarke told Radio 4's Today Programme this morning: "I think it is outrageous. I think we do need action immediately.

"News International has to publish the full list of those that they have bugged. I think that David Cameron has to sack Andy Coulson because his denial is very narrow in the extreme. I think David Cameron himself has to be much clearer about the situation."

Former cabinet minister Geoff Hoon said: "It is hard to see how in these circumstances Andy Coulson can continue as David Cameron's communications chief while such a cloud hangs over his reputation. David Cameron must make clear what action he intends to take on this matter."

The Liberal Democrat home affairs spokesman, Chris Huhne, said: "At the very least Andy Coulson was responsible for a newspaper that was out of control and at worst he was personally implicated."

Clarke also told the BBC the police should be asked why they failed to take action after learning about the extent of the phone hacking and the number of people targeted by News of the World journalists.

They included Taylor, former culture secretary Tessa Jowell, Lib Dem MP Simon Hughes, celebrity PR Max Clifford, model Elle MacPherson and football agent Sky Andrew. News Group denied all knowledge of the hacking, but Taylor last year sued them on the basis that they must have known about it.

"I think that the home secretary should be asking the chief inspector of constabulary for a full report about the police behaviour in this whole incident," Clarke said.

Former deputy prime minister John Prescott, one of the alleged targets of the hacking, also said he wanted answers from the police. "I find it staggering that there could be a list known to the police of people who had their phone tapped.

"I'm named as one of them. For such a criminal act not to be reported to me, and for action not to be taken against the people who have done it, reflects very badly on the police, and I want to know their answer."

Prescott also called on Cameron to dismiss Coulson.

Coulson said yesterday: "This story relates to an alleged payment made after I left the News of the World two and half years ago. I took full responsibility at the time for what happened on my watch but without my knowledge and resigned."

John Whittingdale, chairman of the Commons culture committee, said he wanted to summon newspaper editors to answer "serious" questions about the allegations.

"There are a number of questions I would like to put to News International on the basis of what the Guardian has reported," he said.

His committee would examine the issue "as a matter of urgency" at a scheduled meeting later today, he said. "It may well be that we decide we wish to have somebody from News International to appear before us."

He said he had seen no "direct evidence" that assurances previously given to the committee by the publisher on the matter had been untrue.

But Whittingdale added: "If that is the case it does beg the question why News International have apparently paid huge sums of money in settlement of actions in the courts. That is a question I would wish to put to News International."

It is possible that Coulson could be called to give evidence if the committee decides to reopen its investigation into the affair.

News International executives told the committee in 2007 that they were unaware of Goodman's activities or those of Glenn Mulcaire, a private investigator who worked for the company.

He was jailed along with Goodman in January 2007.

The Press Complaints Commission investigated the allegations but failed to find evidence of wrongdoing. It did not question Coulson as part of its investigation.

The payments to Taylor and two other individuals secured secrecy in three cases that threatened to expose evidence of Murdoch's journalists using private investigators who illegally hacked into the mobile phone messages of numerous public figures to gain unlawful access to confidential personal data, including tax records, social security files, bank statements and itemised phone bills. Cabinet ministers, MPs, actors and sports stars were all targets of the private investigators.

The evidence unearthed by the Guardian may open the door to hundreds more legal actions by victims of News Group, the Murdoch company that publishes the News of the World and the Sun, as well as provoking police inquiries into reporters who were involved and the senior executives responsible for them.

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