* Court hears of affair at heart of Murdoch empire
* Brooks, Coulson both close to PM Cameron
* Prosecution says both knew of hacking by reporters
* Defendants deny charges
By Kate Holton and Michael Holden
LONDON, Oct 31 (Reuters) - Rebekah Brooks and Andy Coulson,former editors of Rupert Murdoch's now-defunct News of the Worldtabloid, had a six-year affair at the time their reportershacked phone messages of politicians and royalty, a London courtheard on Thursday.
Revealing their close ties, prosecutor Andrew Edis said theintimacy of their relationship indicated both knew as much asthe other about the criminal activities of senior journalists onthe paper.
Brooks and Coulson are on trial accused of conspiring tohack into phones of high-profile public figures or those closeto them and also making illegal payments to public officials,charges they deny.
"It isn't simply that there was an affair. What effect didit have?" Edis told the court. "It isn't to do with whether theyhad sexual relations with one another ...(but) how close werethey? They were very close indeed."
Coulson went on to become the chief media spokesman forPrime Minister David Cameron while Brooks, a close confidante toMurdoch, went on to be chief executive of News International,the tycoon's British newspaper group.
The revelation of the affair is likely to bring moreembarrassment to Cameron, who has long been accused by criticsof being too close to Murdoch's News Corp media empire.
Murdoch owns The Sun and Times papers and 39 percent ofpay-TV group BSkyB, which opponents say enables him towield too much political influence in Britain.
A public inquiry into media ethics, sparked by the hackingscandal, revealed how Cameron regularly texted or met Brooks fordinner at their country homes.
Edis told a hushed Old Bailey court the affair went to theheart of the case. It began in 1998 and continued for at leastsix years, during which Brooks married her first husband, TVsoap actor Ross Kemp, in 2002. Coulson himself married in 2000.
They showed little reaction to the revelation as they satside-by-side in the glass dock along with six other defendants.Sitting five seats away was Brooks's second husband Charlie,whom she married in 2009 and who is also on trial, accused ofhelping his wife try to hide evidence from police.
Brooks and Coulson's relationship was discovered afterpolice found a document containing a 2004 letter on a computerat Brooks's London home. Brooks wrote the letter to Coulsonafter he tried to break off the relationship, something whichhad obviously caused her a great deal of grief, Edis said.
"I TELL YOU EVERYTHING"
"The fact is you are my very best friend, I tell youeverything, I confide in you, I seek your advice, I love you,care about you, worry about you, we laugh and cry together," theletter said, according to Edis who read it out to the jury ofnine women and three men.
"In fact without our relationship in my life I am not sure Iwill cope."
Edis said the affair had great significance because itimplicated Brooks in the hacking of the phone belonging to amissing schoolgirl, Milly Dowler, who was later found murdered.
Private detective Glenn Mulcaire, who worked for the News ofthe World, has admitted hacking voicemail messages on Dowler'sphone after she disappeared in March 2002.
The court heard the paper printed stories based on thesehacks when Coulson, who was deputy editor, was in charge whileBrooks was on holiday in Dubai. Phone records showed that shewas in regular contact with both him and the newsroom.
"It's simply incredible that the editors did not know whatwas being done that week," Edis said.
It was the 2011 revelation about the Dowler hacking thatprovoked a public storm and led Murdoch to close down the168-year-old tabloid, then Britain's biggest-selling paper.
A public inquiry ordered in its wake by Cameron embarrassedsenior politicians and police who were shown to have very closelinks to press barons including the 82-year-old Murdoch.
CONFIDENCE IN THE SOURCE
The jury was later played an audio recording of Coulsonconfronting former Labour minister David Blunkett in 2004 withrevelations of an affair which Edis said had come about fromphone-hacking. Coulson was heard saying he had full confidencein the source of the story, which he would not reveal.
The story first appeared in the News of the World, whichCoulson was by then editing, and the following days similarstories appeared in Sun, which was being edited by Brooks.
"It tells us Mr Coulson had asked himself and answered theeditor's question; how do I know this is true. It was hackedvoicemail messages, that's how he knew," the prosecutor said.
"Mrs Brooks ... would need to know the answer too. And theanswer would be the same: hacked voicemail messages."
Earlier on Thursday, the jury heard that Brooks and Coulsonhad authorised huge payments to Mulcaire at a time when the Newsof the World was drastically cutting costs.
Brooks and Coulson ordered senior staff to slash budgets butallowed him to be paid about 100,000 pounds ($161,000) a year.
"What was so special about him?" Edis asked the jury ofMulcaire. "Well, what was so special about him was that he wasdoing phone-hacking."
In a bid to get ahead on salacious front-page stories,Mulcaire repeatedly hacked the phones of senior politicians,royalty and even rival journalists to get big stories, the juryheard. The trial is expected to last for six months.
- Company Legal & Law Matters
- Crime & Justice
- Andy Coulson
- Rupert Murdoch
- Rebekah Brooks
- Andrew Edis
- David Cameron