The full scale of phone hacking at News International, Britain's largest and most powerful newspaper group, finally began to emerge on Monday when the Leveson inquiry into press standards heard that 28 of the company's staff are named in notes seized from a private investigator who specialised in the practice.

On a dramatic opening day at the high court in London, Robert Jay QC, counsel for the inquiry, said evidence held by the Metropolitan police for five years showed "at least 27 other NI employees", in addition to the former News of the World royal editor Clive Goodman, appear in notes taken by Glenn Mulcaire.

Goodman and Mulcaire were jailed for intercepting voicemails in January 2007.

The suggestion that the identities of more than two dozen NI staff were scribbled in the margins of Mulcaire's notes is the clearest indication yet that journalists at the company engaged in the practice systematically.

"This fact alone suggests wide-ranging, illegal activity within the organisation at the relevant time," Jay said.

The evidence has been in police possession since it was seized in a 2006 raid on Mulcaire's offices.

Mulcaire was in the habit of making a note of the name of the person who commissioned him in the top left corner of his paperwork.

Given the number of News International journalists who appear, questions will also be raised about whether journalists at the Sun might have used Mulcaire.

The words "the Sun" also appear in his notes, Jay told the inquiry, although no name appears alongside it. News International did not comment on Monday. The company is currently being sued in the civil courts by about two dozen public figures and victims of crime who allege their phones were hacked.

The inquiry, which is expected to take evidence until February, heard that another "name relating to the Mirror" may also appear in Glenn Mulcaire's notebooks, although this was the subject of further investigation.

This is the first time the possibility that the Mirror may have commissioned the investigator has been raised.

A spokesman for its publisher, Trinity Mirror, said on Monday the company "has no knowledge of ever using Glenn Mulcaire".

Trinity Mirror says its journalists operate within the law and follow the Press Complaints Commission's code of conduct.

It seems likely that the inquiry, established by David Cameron in the summer after the Guardian revealed a mobile phone belonging to Milly Dowler had been hacked, will examine whether the practice was widespread on Fleet Street.

In his opening remarks on Monday Jay said: "The inquiry is beginning to receive evidence to indicate that phone hacking was not limited to that organisation [News International]."

Jay read out a list of damning new statistics that illustrate the scale of what he called the "thriving cottage industry" Mulcaire was running on behalf of his client. He revealed that Mulcaire received a total of 2,266 requests from News International journalists in the period covered by his paperwork, 2,142 of which were made by four employees. They have not been named to avoid jeopardising the police inquiry. The most prolific of them made 1,453 of those requests.

Police also uncovered 690 audio recordings made by Mulcaire, which included 586 voicemail messages intended for 64 people. A further 38 recordings were made of Mulcaire "blagging", or impersonating a member of the public in order to obtain confidential information about them.

"It is clear that Goodman was not a rogue reporter," Jay said. "Ignoring the [one undisclosed] 'private' corner name, and the illegibles, we have at least 27 other NI employees."

He told the inquiry: "Either senior management knew what was going on at the time, and therefore, at the very least, condoned this illegal activity, or they did not and NI's systems failed to the extent that there was, at the very least, a failure of supervision and oversight."

Jay added: "Questions might be asked as to how high up in NI the metaphorical buck stops.

"This gives rise to obvious questions about the culture of the organisation, and as to how far this went up. Was there a culture of denial or, even worse, cover-up?"

Mulcaire's 11,000 pages of notes mentioned 5,795 names, he confirmed, who could be potential phone-hacking victims. Scotland Yard also gave evidence to the inquiry, admitting in its opening statement that it had grown too close to the press.

Earlier Leveson had said the inquiry would consider granting "protected measures" to whistleblowers who were afraid of criticising their employer or speaking truthfully about press ethics.

Witnesses are expected to include the former News of the World undercover reporter Mazher Mahmood, who now works for the Sunday Times. He has submitted written evidence and will give oral evidence to the inquiry at a later date.

Lawyers representing NI will make their opening statement to the inquiry on Tuesday. The Daily Express publisher, Northern & Shell, and the Daily Mail owner, Associated Newspapers, will also address the court for the first time.

Meanwhile one of the allegations that led to former assistant commissioner John Yates quitting Scotland Yard was found to be baseless on Monday. The Independent Police Complaints Commission had been called in by Yates's employer, the Metropolitan Police Authority, to investigate claims he helped the daughter of the former News of the World executive Neil Wallis get a job with the Met. The IPCC said its investigation into the allegation would end without any disciplinary hearing.

• This article was amended on 15 November 2011. The original said the inquiry heard the words "Daily Mirror" may appear in Glenn Mulcaire's notebooks. This has been corrected to a "name relating to the Mirror". The article was also amended to remove an incorrect statement that Jude Law is suing the Mirror.