Rebekah Brooks was asked to be a prosecution witness in Scotland Yard's first investigation into phone hacking in 2006, the Old Bailey has heard.
Brooks was asked to consider giving evidence at a future possible trial of private investigator Glenn Mulcaire for alleged phone hacking on behalf of the News of the World during a private briefing she had with police in the RAC Club in London on 14 September 2006.
The police requested the meeting and Brooks suggested the venue. It took place one month after the arrest of Mulcaire, the hacking trial has heard.
Brooks, editor of the News of the World's News International sister paper the Sun at the time, said she was told by DCI Keith Surtees during the meeting that her phone had been hacked by Mulcaire over a lengthy period of time.
He explained that although Brooks had changed the pin code on her voicemail from the factory setting, Mulcaire had been in possession of her personal pin code.
"He asked me if I had known Glen Mulcaire and had I given him permission to access my voicemail, strange questions like that, the answer to which was 'no, no, no'," Brooks told the jury on Wednesday.
She said that Surtees told her that she was one of 100 to 110 victims and that police needed a certain number of them to agree to be witnesses in order for Mulcaire to be brought to trial.
Brooks reported back on the meeting to the News of the World editor at the time, Andy Coulson; Tom Crone, the legal manager of the Sun and News of the World; and other senior staff, the court heard.
Crone went on to email Coulson, telling him of the extent of Mulcaire's hacking.
In the email, which has already been shown to the jury, Crone told Coulson the police were confident they were "bang to rights" on Mulcaire and the News of the World royal editor Clive Goodman; that they had recordings and notes showing a "pattern of victims"; and that police would widen their investigations beyond Goodman if they had evidence to do so.
Brooks told the court on Wednesday that she believed she had told Coulson directly about the police meeting and also the executive chairman of News International at the time, Les Hinton.
After discussion, it was decided she should not become a prosecution witness in a future trial of Mulcaire.
"After talking to Tom Crone and Les Hinton, we all agreed that it would not be the right thing for me to do to make a formal complaint or to go on to be a prosecution witness; the complexities that would cause on a corporate level given the private detective worked for News of the World, I think we all agreed," she said.
Earlier, Brooks had told the Old Bailey of the "huge shock and confusion" at the News of the World after the paper's royal editor and private investigator were arrested over phone hacking in 2006.
Brooks, who was editor of the Sun at the time of the arrests, said there was "shock and surprise" at her paper that royal editor Clive Goodman had been arrested when counter-terrorism officers raided the News of the World offices on 8 August 2006.
She told the jury there was an element of "anger" from Sun journalists that self-confessed phone hacker Mulcaire had been "cheating" by intercepting voicemails.
"It was the enormity of a raid of the News of the World by the counter-terrorism squad, it was a huge thing – I don't think it had happened before – and that the royal editor had been arrested on interception of voicemails," she said.
Asked about the corporate reaction from the News of the World's parent company, News International, Brooks said: "Well, I would say a great deal of concern was everybody's reaction. I think initially there was certainly concern about the investigation: what it had covered so far, where it was going, what the counter-terror squad were doing.
"I can't remember when it came out that the counter-terror squad had been looking at the News of the World and Glenn Mulcaire for quite a long time before the arrests. It was all quite an anxious situation."
Brooks, who edited the News of the World before taking charge at the Sun in 2003, was on holiday in Italy when she was told by her then deputy at the Sun that Goodman had been arrested, the court heard.
After this, Brooks spoke to Coulson. Brooks said she could not recall whether Coulson told her what Goodman had been arrested over in the initial telephone call, but said "he sounded very shocked and concerned".
Brooks said there was a "grumpiness" from the Sun newsdesk towards Mulcaire because Fleet Street had acknowledged that the use of private detectives to glean information was a "collective failure".
"If not a big national story, it was certainly a big media story," she said. "The Sun newsdesk would have been as interested in it as everyone else and it was the sister paper and people they knew."
She added: "I think there was a general surprise about Clive. From our point of view at the Sun, I think there was a disbelief at the allegations at first. Then as time went on, [it] maybe looked like they [started] being true, maybe shock and surprise at Clive.
"I think the newsdesk at the Sun were … it was all really to do with private detectives. There was a certain, not anger towards the News of the World, but anger towards this private detective, like he'd been cheating, that he'd been intercepting voicemails."
Brooks said she was "pretty shocked" when she was told by police that Mulcaire had been accessing her voicemail messages. "Certainly surprised. I remember my reaction being that I had a personal pin code, so I didn't think it was possible," she said.
The court heard that Goodman threatened to take News International to an employment tribunal and alleged that others at the News of the World knew he had been illegally accessing voicemail messages.
Brooks said she never believed the allegations were true because she had "had it from the horse's mouth" – referring to her meeting with DCI Surtees – that there was no evidence of a wider phone-hacking conspiracy at the title.
"I don't think anybody, me included, thought the allegations he was making were founded in any way, but were based on his dismissal," she said, adding that News International wanted to settle with Goodman before the tribunal came to court.
"I think the company felt although they believed the allegations were unfounded, without any basis whatsoever, [the company did not want] to go through an embarrassing court tribunal to come back into more damaging headlines."
Brooks told the jury that Goodman was going to allege in a tribunal that it was "pretty much everybody who had a senior role in the NoW, certainly in the news department" who knew about phone hacking.
She said she felt there was no foundation to his allegations, but he felt she needed to find "a middle way", hence the job offer to do a 10th-anniversary supplement for Princess Diana's death, or to launch a sub-editing training course at the Sun.
"I went [to lunch] for an objective – offering him a job to stop going through this industrial tribunal."
Brooks denies conspiring to intercept voicemail.
The trial continues.
