The phone-hacking story took a new and dramatic turn yesterday as a former journalist on the Daily Mirror claimed that the practice was "endemic" at the newspaper during his time there and that he would be willing to testify to investigating authorities.

James Hipwell, 45, told The Independent that hacking at the Daily Mirror was widespread and "seen as a bit of a wheeze". He said he would give evidence to a public inquiry into hacking ordered by David Cameron and headed by Lord Justice Brian Leveson.

Until now the hacking scandal has been confined to the News of the World, recently closed by News International, but there have been widespread claims similar activities were carried out in other media organisations.

Hipwell worked at the Mirror under the editorship of Piers Morgan, now a presenter with CNN. He was made aware of the hacking because the paper's City desk, on which he worked, was next to the showbiz desk. "You know what people around you are doing", he said. "They would call a celebrity with one phone and when it was answered they would then hang up. By that stage the other phone would be into their [the celebrity's] voicemail and they would key in the code, 9999 or 0000. I saw that a lot."

He also alleged that hacking took place on other newspapers within the Trinity Mirror group, including The People, where Sean Hoare was working before moving to the News of the World. "It was endemic. Sean didn't suddenly move from one tabloid where it didn't happen to another where it did. But at the time it wasn't illegal."

Trinity Mirror, the publisher of the Daily Mirror, denied Hipwell's claims. "Our position is clear," said a spokesman. "Our journalists work within the criminal law and the Press Complaints Commission code of conduct."

Hipwell was fired from the Mirror in 2000 over the "City Slickers" scandal in which he was accused of buying shares before tipping them in the paper. He was convicted of market manipulation and served 59 days in jail. Morgan was found to have spent £67,000 on shares tipped by the column but said this was coincidental and was not charged.

Earlier this week, Morgan was involved in an on-air row with the Conservative MP Louise Mensch after she used parliamentary privilege to claim he had admitted the Mirror was involved in hacking. Morgan furiously denied the claim and challenged Mensch to repeat the accusation outside of Westminster, which she refused to do.

In an interview in GQ magazine in 2007, Morgan discussed hacking with the model Naomi Campbell and said: "Loads of newspaper journalists were doing it. Clive Goodman, the News of the World reporter, has been made the scapegoat for a widespread practice."

Hipwell told The Independent: "Piers was extremely hands-on as an editor. He was on the [newsroom] floor every day, walking up and down behind journalists, looking over their shoulders. I can't say 100 per cent that he knew about it. But it was inconceivable he didn't."

He continued: "It was seen as a bit of a wheeze, slightly underhand but something many of them did – what a laugh. After they'd hacked into someone's mobile they'd delete the message so another paper couldn't get the story."