LONDON, Oct 30 (Reuters) - Rupert Murdoch's former editor Rebekah Brooks and Andy Coulson, Prime Minister David Cameron's ex-media chief, oversaw a system of phone-hacking and illegal payments to officials when they ran the now defunct News of the World, a London court heard on Wednesday.
Prosecutor Andrew Edis told the Old Bailey that Brooks and Coulson were in charge at the Sunday tabloid or its daily sister paper the Sun when the illegal behaviour was alleged to have taken place.
Edis said both had sanctioned illegal payments to be made to public officials, including one by Brooks for nearly 40,000 pounds ($64,000) to a senior Ministry of Defence official. Coulson is accused of authorising a payment to a royal police protection officer to secure a phone book with contact details for royal staff.
When police finally began to reveal the truth, Brooks and other figures at Murdoch's British newspaper business - then known as News International - mounted a cover-up, Edis said.
Brooks and Coulson are on trial with six others, accused of conspiring to hack phones and make illegal payments. They deny all the charges. She also faces two counts of conspiracy to pervert the course of justice.
The court heard on Wednesday that three former senior journalists from the News of the World had pleaded guilty to charges relating to phone-hacking, and Edis said the jury would have to decide whether Brooks and Coulson were likely to have known about the illegal behaviour.
"There was phone hacking, and quite a lot of it," Edis said.
"Given they (Brooks and Coulson) were so senior, if they knew about it, well obviously they were allowing it to happen. They were in charge of the purse strings."
The court was told that ex-chief correspondent Neville Thurlbeck, former assistant news editor James Weatherup, and ex-news editor Greg Miskiw had admitted conspiracy to intercept communications at earlier hearings.
Their guilty pleas, which had not previously been reportable, are the first public admissions by former News of the World journalists since police launched an inquiry in 2011 into allegations that staff on the Murdoch paper had hacked the phones of celebrities, politicians and victims of crime.
The court was also told that private detective Glenn Mulcaire, who worked for the paper, had also pleaded guilty to hacking the mobile phone of missing schoolgirl Milly Dowler.
"He was alleged to have hacked the phone of Milly Dowler and he has pleaded guilty to this," Edis told the court as he set out the case for a trial that is expected to last six months.
It was the revelation of the hacking of Dowler's phone in July 2011 which caused uproar across Britain and led Murdoch to closing down the 168-year-old News of the World.