* Murdoch rejected CEO's resignation at height of scandal
* Brooks ran News Corp's UK paper business
* Court hears she was escorted out of HQ
* Brooks tells how husband hid large porn collection
By Michael Holden
LONDON, March 4 (Reuters) - Rebekah Brooks, former boss of Rupert Murdoch's British newspaper arm, told a London court on Tuesday how the media mogul had persuaded her not to quit amid public revulsion over the hacking of a murdered schoolgirl's phone.
Brooks, on trial for phone-hacking offences, said a 2011 report that journalists on Murdoch's News of the World tabloid had tapped the voicemail messages of 13-year-old Milly Dowler had caused a national scandal, with her at its centre, describing it at the time as a "sexist witch hunt".
Despite the furore, Murdoch and other senior figures told her not to resign, and she told the Old Bailey court that former Prime Minister Tony Blair and CNN talk show host Piers Morgan had also contacted her to offer support.
After she finally quit when her role became untenable, she said she was escorted from the company's London headquarters following demands from the police.
The outrage began on July 4, 2011, when the Guardian newspaper reported that journalists from the News of the World (NoW) had accessed voicemails on the girl's mobile phone while she was missing nine years earlier, and had deleted some, giving her parents false hope that she was still alive.
The scandal led Murdoch to close the 168-year-old newspaper and ditch a $12 billion bid to take full control of British pay-TV operator BSkyB.
The court has heard Glenn Mulcaire, a private detective who worked for the paper, has admitted hacking Dowler's phone but police had ascertained he had not deleted any voicemails.
Brooks, the NoW editor at the time of the hacking of which she denies all knowledge, said she had been at a fertility clinic with her cousin, who was carrying her surrogate baby, when she was alerted to the news. "First of all I didn't believe it," she said. "It was pretty horrific."
MESSAGES OF SUPPORT
She said the news had stunned bosses at News International, News Corp's British paper business, and as the storm grew, leading to death threats against her, she had been deluged with messages of support from friends and colleagues.
"When it rains, it fucking pours. Grit your teeth and stay strong," Morgan wrote in a message to her. She replied: "Terrible, made me feel sick watching the news, can't believe any reporter could do that, must have been Mulcaire."
Later she heard from Blair. "Thinking of you. Anything I can help you with. I have been through things like this," he wrote.
In another exchange, a friend suggested the anger directed at her was misogynistic, prompting her reply: "Feeling slightly like a sexist witch hunt at times."
Days after news of the hacking, the decision was taken to close the paper, which she said had led to anger from its staff because while they were losing their jobs, she was keeping hers.
Brooks told the jury there was no immediate suggestion she should quit from her bosses including Murdoch's son James, in charge of News International (NI) at the time.
When Rupert Murdoch flew into London on July 10 to deal with the growing scandal, she said: "He asked me not to (resign)," adding as the week went on the situation changed.
"IMPOSSIBLE TO CARRY ON"
"Although Rupert Murdoch didn't want me to resign that day, it was obvious it was impossible for me to carry on in that position," she told the court. She said there were discussions about whether she should resign or take a leave of absence, complicated by her being summoned to appear before a parliamentary committee the following week.
She told the court it was hoped if she went as CEO, Rupert and James Murdoch might not have to appear. In the end, they were called as well.
By July 14, it was felt by everyone it would be better if she quit, she said. The following day her resignation was announced and she began a tour of the News International headquarters to make her farewells.
She said: "(NI executive) Will Lewis said the situation had changed, the police want you out of the building immediately. Will did use this phrase something like if you don't leave immediately, they're going to send the pandas (police cars) round." She was told she couldn't take anything with her.
Two days later, she was arrested after going by arrangement to a police station, spending "quite a few hours" in a cell.
Prosecutors have told the court that her husband Charlie was involved in a plot to remove material from their London flat before police arrived to search it.
The jury was told his plan failed because a cleaner found a bag they had tried to hide. Brooks said the day after her arrest, Charlie, who is also in the dock on a charge of conspiracy to pervert the course of justice, had told her about a "mix-up".
"He said he had given his bag to security. It seemed like a very odd story," she said.
"He had hidden his rather large porn collection. He then said to me the police had found his bag by the bin. It seemed like a monumental cock-up. It was just kind of the final straw in what had been a cataclysmic few days."
Brooks denies conspiracy to illegally intercept voicemails, authorising illegal payments to public officials and perverting the course of justice.
Her trial and that of her husband and five others continues.
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