Ex-NOTW editor on paper's methods: "You have to be cleverer than the criminals"

Paul McMullan, former News of the World deputy features editor, gives evidence at the Leveson inquiry. Photograph: ITN6.56pm: Our story on the extraordinary testimony of Paul McMullan, former deputy features editor of the News of the World.

6.45pm: We're wrapping up the live blog for the day and will be back tomorrow for Alastair Campbell and Alex Owens, who used to work for the Information Commissioner.

In the meantime here's some written witness statements from today.

Nick Davies statement

Richard Peppiatt statement

Paul McMullan's evidence has not been published yet and is expected to be redacted.

Peter Hain – who has been warned that his computer may have been hacked – was Northern Ireland secretary from 2005-2007. Photograph: Sportsphoto/Geoff Newton 6.40pm: The Northern Ireland Office has issued a statement in relation to the alleged hacking of Peter Hain's computer.

A NIO spokeswoman said:

The Metropolitan Police has confirmed with us that no departmental systems or assets are involved in its investigation.

6.25pm: Cabinet minister Jeremy Hunt told a parliamentary committee the phone-hacking scandal would have emerged earlier if the police had not "closed down their inquiry at a very early stage".

The Press Association is reporting:

The culture secretary Jeremy Hunt said the failure to uncover the story was not "a failure of investigative journalism".

He pointed out the police had looked at in 2009 and said there was no need for a new investigation. Earlier this year they re-opened their inquiries after "significant" new evidence was given to them by News International.

Mr Hunt told the committee the "biggest threat" to the future of investigative journalism was a "potential lack of profitability in the newspaper sector as a whole".

But he ruled out state funding, saying: "One of the main people we want them to do investigative journalism on is the state."

He said the role of good investigative journalism was "about creating a structure in society that challenges the establishment, so it's essentially about making life difficult for the government and for parliamentarians as well".

6.20pm: Hayley Barlow, former PR chief from News of the World has tweeted this about McMullan:

News International must be just thrilled Yucky McMucky signed compromise agreement. £60k jolly well spent! #hackgate

5.52pm: If you haven't had enough of Steve Coogan, Hugh Grant and Max Mosley, put this date in your diary: December 5 when all three will appear before the joint house of commons and Lords committee investigating privacy and injunctions.

5.00pm: Here's a 5pm roundup of Paul McMullan's evidence:

• Andy Coulson brought phone hacking "wholesale" to the News of the World, says Former NoW deputy features editor says

• Paul McMullan brands Andy Coulson and Rebekah Brooks "the scum of journalism"

• He describes Brooks as "arch criminal" and "criminal-in-chief"

• Hacking Milly Dowler's phone was "not a bad thing"

• He claims Coulson and Brooks knew about hacking

• "Privacy is for paedos"

• Car chases when Diana was alive were "such good fun"

4.50pm: The inquiry is now hearing submissions from various barristers.

David Sherborne says that a witness statement has been served by Jemima Khan about the accusation from Associated Newspapers that the Hugh Grant story was leaked by someone close to her.

There is now some legal discussion as to whether this evidence is required under the terms of the inquiry.

4.47pm: McMullan has now finished giving his evidence.

4.46pm: McMullan finishes his evidence by explaining he does not think the hacking of Milly Dowler's phone was malicious.

The hacking of Milly Dowler's phone was not a bad thing for a well-meaning journalist to do.

He explains what he means by telling Leveson his child went missing recently from his back garden for 20 minutes and he "felt the emotion that Mrs Dowler felt when her own child went missing".

He said it was difficult to say that he condoned the phone hacking because the police force looking for her were full of "Inspector Clouseaus".

We were doing our best to find the little girl. The police are utterly incompetent and should be ashamed that the killer was allowed to carry on.

Paul McMullan on a culture of illegality at #Leveson (mp3) 4.45pm: Audio of Paul McMullan talking about a "culture of illegality" between the press, politicians and police

4.42pm: Guardian editor-in-chief Alan Rusbridger has just tweeted:

McMullan now defending the PCC. They must be grateful for that.

4.40pm: McMullan is talking about John Yates, the former assistant commissioner of the Met police.

Those people, Yates and the other guy, they fell on their swords because clearly there had been a cover-up because it had become quite an intimate relationship between journalists, police and politicians.

People have stepped back a bit. The glory days of the 1990s when it was so much fun, before Diana died, have gone. People do take notice of the PCC.

Rebekah Brooks. Photograph: Phil Noble/Reuters 4.39pm: McMullan reveals he stuck a surveillance van outside Rebekah Brooks's house in recent months in the hope of getting a story linking her to Cameron.

And he has "spent a while in the Cotswolds and the pubs where they used to meet each other".

I thought what a great story [if I catch them plotting with Cameron] … this is my Watergate, I'm going to bring down the government.

I didn't mean to bring down the News of the World, but I got nothing. I'm entirely responsible for the reopening of the investigation of Glenn Mulcaire's notebooks and the revelations about Milly Dowler and here we are today.

4.35pm: McMullan says News International has been "cosying up" to prime ministers for 21 years from the moment Margaret Thatcher "tapped up Murdoch" and asked him to back her.

He claims Cameron had a lot owing and alleges he turned a blind eye to illegal activities.

He ends up with Murdoch lite – James – and Rebekah Brooks. For 21 years you have a culture of illegality of phone hacking and fiddling your expenses and so on. What you have is a future prime minister cosying up and being moulded by the arch-criminal, Rebekah Brooks, the criminal-in-chief.

4.28pm: McMullan says transcripts of tapes would take up to three hours to do, but they were an essential, if tedious, part of the job.

Tom Crone [the News of the World legal boss] would want to either listen to the tape or read the transcript.

It was Tom Crone's job to make sure anyone who was trying to sue was headed off at the pass because 'here's the video' or 'here's the tape'.

Paul McMullan shows the Leveson inquiry a picture of his surveillance van: Reuters 4.27pm: McMullan says the News of the World stories have repercussions – he remembers one TV star being sacked.

Jefferson King – a Gladiator on TV. [I'd say] 'Tell me all about it and I'll turn you into a role model' and got him to say, 'Yeah I've done a line of cocaine' and immediately I rang up ITV and got him the sack.

It was a sacking offence not to do an interview that wasn't recorded.

.

4.22pm: McMullan says he regrets the stories he did on Jennifer Elliott, the daughter of actor Denholm Elliott.

She became a drug user and started begging following the death of her father and the News of the World exposed this.

I really regret it because I'd got to know her very well and I really quite liked her. The fact she was begging outside Chalk Farm station came from a police officer, who had been surprised when he asked her to move on.

I went too far on that story. Someone crying out for help, not crying out for a News of the World reporter.

I then took her back to her flat and took a load of pictures of her topless.

Then she went on TV and described me as her boyfriend.

He adds:

When I heard a few years later that she'd killed herself I thought 'Yeah that's one I really regret.' But there's not many.

Sometimes I wouldn't have bought the News of the World even though I worked for it, but the British public carried on.

4.20pm: McMullan is asked to clarify whether he believes that no one should have privacy. He says "yes".

In 21 years of invading people's privacy I've never actually come across anyone who's been doing any good. Privacy is the space bad people need to do bad things in.

Privacy is evil; it brings out the worst qualities in people.

Privacy is for paedos; fundamentally nobody else needs it.

4.18pm: McMullan claims celebrities know their careers live and die by the press – and they exploit that.

I missed Katie Price one day going into the hairdressers. And it was like 'God, Katie, be nice.' And she gave me the finger through the hairdresser's door and I thought 'Aw, thanks love'. I sold it for £2,000. She knew exactly what she was doing.

4.17pm: McMullan says Hugh Grant should be grateful for the interest.

If you keep banging on about your privacy, all of a sudden you'll have 10 times as many photographers outside your door, he says.

I have a huge amount of cynicism for both Hugh Grant and Steve Coogan who have really done quite well by banging on about their privacy.

All you [Hugh Grant et al] have to do is jump off the stage for five minutes and people lose interest very very quickly.

4.15pm: McMullan says the job was also extremely dangerous.

He recalls "sitting with two guys who would knife me at the drop of a hat – it was a very dangerous job – I was getting close to the end of the tape and just waiting for the click. I had to get out of there. It was like a test. They rolled a bit of joint and put cocaine in it. [They then asked him to smoke it to make sure he wasn't a policeman.] … That's the kind of pressure you're under when you're doing an investigation."

4.14pm: McMullan says he was happy to go through bins in pursuit of a story.

I think most journalists, me included, would find the contents of people's bins incredibly interesting. It gives you a much better starting point, much better than hacking into people's phones.

So were bins rifled for information? "Er, yeah."

4.11pm: McMullan adds all News of the World photographers had to go to work wearing a suit after Diana died.

4.10pm: McMullan says he loved the car chases involved in covering Princess Diana.

He says they would also watch Paul McCartney's home but would change cars frequently so they wouldn't be identified as reporters.

We had a set of pool cars – about 12 – that you can swap around. I absolutely loved giving chase to celebrities. Before Diana died it was such good fun. How many jobs can you have car chases in? It was great.

He also said:

I absolutely loved giving chase to celebrities. How many jobs can you have car chases in? It was great.

4.06pm: McMullan is talking about "blagging". He says:

I felt comfortable with my own blags. The decent investigators will never leave a paper trail.

I'd laugh at the police if they came to arrest me. I know what I did and I know what I might have paid. I would not have been so stupid to get someone to do something illegal and then bill me for it.

4.04pm: McMullan says private investigators would get legal information and use computer technology you can buy off the shelf to locate a person "within a matter of minutes".

The good legitimate private investigators can spin around an address in a matter of minutes and it's worth paying because the deadline is minutes away and someone's going to get there ahead of you.

4.03pm: McMullan is asked if the Sunday Express used private eyes.

Yes, he replies, but they were totally legitimate and didn't step over the boundaries.

4.01pm: McMullan says the private investigators didn't have much pedigree – one was a failed footballer, another was a Hell's Angel who was so bad at his job he would get them into trouble.

I tried to rein it [the use of PIs] in, but not only that, I wanted to know exactly what they were doing so I demanded the tapes of the blags. Finally when I listened to some of the tapes they were awful and I realised they were worse than what I could have done.

Steve Whittamore at least had a pedigree and was quite credible in a sense.

I stopped using the Hell's Angel as soon as I heard the tape because I thought 'what a lot of trouble he's going to get us into' ... much as I tried to rein it in there were other parts of the paper who were pressing the accelerator and I lay the blame there with Andy Coulson.

3.57pm: McMullan says the use of private investigators at the News of the World was "too extensive".

When he took over as deputy features editor, he couldn't believe the budget Rebekah Brooks had for private detectives.

I spent five years as a features reporter, then as soon I inherited the budget from Rebekah Brooks I realised that some weeks we were paying Steve Whittamore £4,000 … we could have two feature writers for that.

It was just the laziest reporters who made the phone calls to the PIs … because they didn't want to go to Middlesborough for the story.

All that was needed, he said, was to have someone go up in a car and follow the person involved.

3.56pm: McMullan says "There's a difference between answering the phone to a doctor who knows that a star is pregnant and flicking through medical records." He recalls a private investigator who specialised in medical records ,but cannot be more specific.

3.55pm: McMullan claims a police source was paid for a story about Denholm Elliott's daughter.

"It was the crime guy who facilitated that payment," he says.

Princess Diana. Photograph: John Stillwell/PA 3.53pm: McMullan says the paper once got a scoop on Princess Diana from one her security guards.

Someone phoned and said she was landing at Helsinki airport at 3.30pm this afternoon; 'Can I have £30,000, I need to pay the mortgage?' [and the answer is] 'Yes.'

Dangling a carrot with a lot of money was a way to get the best stories, which the British public lapped up.

3.51pm: McMullan says the News of the World had "5m reporters" in the shape of its readers. The phone would ring non-stop in the office with people trying to sell stories.

Putting his hand to his ear to imitate picking up a phone he says:

'Hello, Victoria Beckham has just walked into a doctor's surgery, can I have £10,000?'

Then 'Hello, I'm the receptionist, Victoria Beckham has just walked into the doctor's surgery and she's pregnant – can I have £10,000?'

3.48pm: McMullan is explaining stings. He says he posed as different characters on Mahzer Mahmood's investigations on the paper.

Mazher was always the fake sheik and I was either a drug user, a drug dealer or a millionaire from Cambridge.

I was only a rent boy once – hopefully I don't look too much like one.

He was asked to track down the woman who took John Major's virginity and found her in France.

We found her but couldn't get picture of her with her new boyfriend. I think the cleaner was in so I blagged my way in and pinched it off the mantlepiece. Rebekah Brooks said 'No, put it back we're not allowed to nick stuff', but Piers [Morgan - former editor of the News of the World] said 'Well done'.

3.45pm: The inquiry takes a short break and when McMullan returns, he says:

Would we hack phones, yes, but it's not necessary all the time.

Barr asks if blagging as a technique was reserved for certain cases.

You can't just say I work for the News of the World and tell me all the stuff you've been get up to. It doesn't work like that, you have to be cleverer than the criminals.

Daily newspapers wouldn't have to use it half as much as a Sunday, which deals in exclusives. If you want to do an exclusive then yes blagging would be completely necessary.

3.43pm: Dan Sabbagh has just tweeted:

Am hearing that McMullan witness statement won't be published soon amid arguments about redactions. Too controversial?

3.42pm: McMullan says that UK legislation or future legislation doesn't matter because the foreign paparazzi or private investigators will still get around the laws.

He is asked first about hacking smartphones.

Can they read my texts? There is an app where you get a text it can be transmitted to some body else's phone.

But he says it doesn't matter.

You might be able to legislate, but the Italians, Mexicans, the paparazzi all round the world won't give a hoot what you're saying, they won't be watching, all they want to do is make money.

It doesn't matter at all what you say, or what laws you bring in, because it won't stop it.

3.40pm: McMullan is asked if the News of the World was responsible for hacking into anyone's email account to his knowledge.

He replies: "I don't know. Certainly it's not something I ever needed to do to do a story."

3.40pm: He says the criminal underworld still use digital scanners.

He says he thinks you can buy them in US and with a few little twiddles you can make them work in the UK.

"I haven't used one, it's technology that's beyond me," he says.

3.38pm: McMullan is now talking about the "squidgy tapes" – tapes of Diana, Princess of Wales, talking to her friend James Gilbey.

He said he believed the tape came from a BT phone, but a cordless one.

3.37pm: McMullan says he believes that the News of the World was one of the "least bad offenders" among newspapers in relation to phone hacking.

3.36pm: McMullan is now talking about Hugh Grant:

I don't recall having his number and I don't recall being in a situation where it would have been useful.

I wanted to do Hugh Grant a favour … I want to say in return 'The source of the Ting Lan story was not from a phone hack; it came from one of your friends.' They wrote me a letter saying that basically that he'd got her pregnant, maybe I'd like to stick a surveillance van outside and get a good set of pictures.
It was just one of his mates getting up to mischief.

3.35pm: McMullan says it is unfair that the bosses at News International blamed ordinary working journalists for the phone-hacking scandal and not accepting the blame themselves.

Journalists like Clive Goodman should have been the "heroes of journalism".

Andy Coulson. Photograph: Dan Kitwood/Getty Images 3.34pm: McMullan claims Andy Coulson brought the practice of phone hacking to the News of the World.

Andy Coulson brought the practice wholesale with him when he was appointed deputy editor.

I couldn't believe it – he should have been made a reporter, not deputy editor.

3.30pm: McMullan adds:

We did all these things for the editors, Rebekah Brooks and Andy Coulson...

They're the scum of journalism for trying to drop me and my colleagues in it.

3.25pm: McMullan is asked directly if his editors knew voicemails were being intercepted. "Yes," he replies.

3.14pm: McMullan is asked if phone hacking was widespread at the News of the World.

It was something that might have been done as a last resort.

3.12pm: McMullan says if he hacked David Beckham's phone – which he is not saying he did – it was in the public interest. He also says an ordinary trick used by teenagers has been elevated into a national scandal about phone hacking.

It was a schoolyard trick practised by many teenagers across the country what is now known as phone hacking.

At least 10% of the population, maybe 20%, may hit nine and listen in ... I didn't hack his phone in that instance because he answered his phone really quickly.

3.11pm: There is now another exchange in which Leveson warns McMullan that he does not have to incriminate himself at this inquiry and that he "should know this".

McMullan says:

We were acting for the public good. Isn't the point of this inquiry that you treat me as a witness than – as Scotland Yard have – as a potential criminal?

3.09pm: McMullan says he would consider hacking John Prescott's phone over the issue of going to war.

He says: "This nonsense in trying to send journalists to jail - it's bad for this country."

There then follows an exchange with Leveson. He tells the judge he is at the inquiry because he was served with a section 21 notice and "was threatened to with jail" unless he showed up.

Leveson replies:

I am not threatening to send you to send you jail for not speaking the truth. I am giving you a platform to say what you want to say.

3.01pm: McMullan repeats his assertion made on Newsnight in July that he thinks phone hacking is acceptable.

I have sacrificed a lot to write truthful articles for the biggest circulation newspaper which is why I think phone hacking is a perfectly acceptable tool if all we were doing to trying to get to the truth.

Charlotte Church. Photograph: Pool/Reuters 2.59pm: McMullan is again being asked about how he feels about the ethics of the paper. He says if readers didn't like the story about Charlotte Church's father having an affair, they didn't have to buy the paper.

I liked the idea that this paper ... was the biggest in the English speaking world. We simply mirrored back what they wanted to read.

They are the judge and jury what's in the paper. If they don't like what you have written about Charlotte Church's father having a three-in-a-bed with cocaine then they won't read it.

2.58pm: Leveson interjects and read backs part of McMullan's statement slowly to make sure he heard correctly.

I felt slightly proud that I had written something that created a riot and got a paediatrician beaten up.

McMullans says he was "being flippant" but there was a serious point – one way you judge your story is get you get a reaction.

Leveson tells McMullan this is why he re-read his statement to make sure it was what he had meant to say.

"It's a bit of a joke," says McMullan.

Leveson says: "Well that may not be the way its reported."

McMullan replies: "I bet it isn't."

2.55pm: McMullan says he doesn't need someone like Max Mosley dictating what people should or shouldn't read.

There were 5m thinking people and that's what they wanted to read.

Leveson interjects and asks what would happen if if the public didn't like the targets of their stories.

If the public found the targets of our stories distasteful they would not have bought it. The inverse is true.

Of interest to the public is what they put their hand in their pocket and buy.

2.54pm: McMullan also worked on the "name and shame" paedophile story which he says was one of the Rebekah Brooks's good ideas.

McMullan offers his definition of public interest

Circulation defines what is the public interest. I don't see it's the job of anyone else to force the public to read this or that.

I don't see it's our job to force the public to choose – 'You must read this and you can't read that.'

2.53pm: McMullan says he has worked overseas on war stories in Kosovo and he also worked on the story about Sangatte, the asylum centre in the north of France.

I spent a night there and got hit on the head from some asylum-seekers from Iraq who were pretty much intent on killing me.

2.52pm: McMullan on the Divine Brown and Hugh Grant story:

I remember Rupert Murdoch saying 'Why are we putting that on the front page – doesn't it bring the tone down a little?'

2.51pm: McMullan is talking about the power of the News of the World.He says the paper was a British institution and wasn't Murdoch's to close.

I think in a sense we wore the most powerful journalists in the country because we had the biggest readership. What I wrote was read by half the adult population …

The News of the World sells over 5m copies. At one point you could say half the population were reading what we were writing. If you're talking the power of the pen, you could say that we were the most powerful publication.

2.50pm: McMullan on working for a well-financed newspaper:

Piers Morgan said 'I don't care what it costs, I just want to get the defining stories of the week.' I never felt financial constraints and that's the joy of working for Murdoch – we had a big pot of money compared to the Guardian which has nothing so pays nobody.

2.49pm: McMullan on paying for private investigaters:

I though we wasted it on PIs; I prefer to spend on people who tell us a good tale about a politician or a sports star.

2.48pm: McMullan said he spent time hiding in vans, having car chases and sneaking quarry in and out of hotels to stop rivals getting a whiff of the paper's story.

If you get a story on Wednesday, you have three days sitting on it hoping nobody else is going to steal it.

2.47pm: McMullan says the consequence of not getting sufficient bylines on the News of the World was you would "get fired".

He says he had to come up with three good ideas for stories week after week and there was a "real pressure" to build up contacts with police and private investigators.

He says there is fierce competition with fellow journalists and competing titles.

Clive Goodman fell foul of phone hacking, he was getting on a bit … young reporters were snapping at his heels and to stay ahead of them he got sucked into phone hacking.

2.45pm: McMullan worked for News of the World for seven years, during which he worked as deputy features editor. He then worked for the Express and the National Inquirer.

He is working at two jobs – in his pub and journalist.

2.42pm: McMullan gives his address as the Castle Inn, Dover.

He started with Thomson Regional Newspapers. He was a journalism student with Michael Gove.

I'm quite pleased to say I finished at the top of my class and he finished at the bottom end and he's now minister for education.

Leveson inquiry: Paul McMullan 2.41pm: Paul McMullan, the former News of the World deputy features editor, is now taking the stand.

David Barr QC will be asking the questions.

2.39pm: Davies has now finished his testimony.

2.38pm: Davies is now discussing a story about David Blunkett's alleged relationship with a married woman. He says he would not have published this because it was "prurient" and an "unjust invasion into his private life"".

However, as the journalists "dug in" to the story they did uncover something of public interest, which was that Blunkett allegedly helped fast track a visa for the woman's nanny.

2.37pm: Leveson is empathetic to Davies.

I am very content with a system that is professionally based that takes work away from the court. I am not in the business of taking work into the court.

2.35pm: Davies says he is in favour of an arbitral system.

Davies asks the inquiry to "take the McCann case" and "the horrific falsehoods" that were written about them.

If there were an arbitration system, within four weeks they would have had arbitration and justice. All those papers would have to publish corrections of the same prominence, on the front page.

They get justice, fairness, truth much much quicker. They don't get damages. I don't think wanted damages.

2.32pm: Davies is now talking about the law regulating the press and describes is as a "horrible concoction of common law and statutory regulation, and it's a mess".

He said if you were drawing up new legislation to cover falsehoods, distortion and unethical behaviour, "you wouldn't come up with anything like the system we have".

He says you wouldn't come up with a system that pays out damages if something false or distorted is printed in a paper. "What you could come up with is a correction of equal prominence," he says.

2.29pm: Davies is now talking about "Benji the binman".

Good reporters like Martha Gellhorn have a sort of "artful dodger" air about them to help them get stories.

Referring to the Guardian's David Leigh, he says:

He could see the exciting potential about this extraordinary man … but he could see that the Guardian weren't going to pay for it … so he passed it on to a friend. He got himself very close to the line and stayed just on the right side of it.

2.26pm: The inquiry is now talking about the "cod fax" and the Guardian's story on Jonathan Aitken.

This refers to an incident in 1994 when the Guardian sent a fax on Commons headed paper to the Ritz to secure Jonathan Aitken's hotel bill.

The Commons privileges committee said it accepted the paper's apology that sending the fax was "a stupid and discourteous thing to have done" and its assurance that it would not do it again.

2.25pm: Davies objects to an assertion by Jay that the contents of his book cannot be tested (because of the confidentiality of sources).

Davies accepts that the Mail would have difficulties establishing whether people paid for stories or not because cash might be drawn from its coffers, but there would be no documentation linking it to any payment for a story. However, he says the Mail could dig a bit further.

It's a pretty fine investigative paper, I think it can get a pretty far way without me.

2.23pm: Robert Jay QC has now told the inquiry that the Daily Mail wants to rebut claims made earlier by Davies regarding its journalists paying police for stories, that "bribing policing men and civil servants" is not its policy.

It also objects to claims in Davies's book Flat Earth News.

2.17pm: Davies says if you go to the subject of the story and that person has PR adviser, if you give them room to manoeuvre, they will put the story out with their own spin and scoop you.

Alastair Campbell was "brilliant" at this, says Davies.

More often than not you go to the other side in case there is some killer fact and for the Reynolds defence, but you do it story by story.

Max Mosley's privacy was violated by the News of the World, a French court ruled; 3,000 copies of the offending paper were distributed in France. Photograph: Leon Neal/AFP/Getty Images 2.17pm: Davies is now discussing the News of the World's decision not to alert Max Mosley to a story about his sexual activities prior to publication. Last week Mosley said he didn't know about it until 10am on the day of publication.

Davies says if he went to Mosley,"he is going to get an injunction on privacy grounds".

I don't approve of the story but I understand why they didn't go near him.

2.15pm: Davies says the Sunday Mirror bought up a kiss-and-tell story. By alerting the other side involved in the story, the person was able to injunct the paper.

Davies says he has his own issues with those kinds of stories, but he says what he is trying to illustrate to the inquiry is the "danger" involved in going to the other side.

2.12pm: But he there are instances where a journalist doesn't go the other side, if he might be putting himself in jeopardy or there are ethical reasons not to seek comment.

Davies says the classic case might be of a paedophile accused of murder and kidnap; if a reporter is preparing a background story they don't go and ask about the kidnapping and murder.

There is an ethical problem here. Do you ask Hitler about concentration camps?

Confidentiality and privacy can also be problematic.

2.08pm: Davies is asked if he agrees that he didn't put any of his criticisms to any of the individuals concerned or to the papers concerned before his book Flat Earth News was published.

He answers "emphatically not".

He says he now lectures young reporters and tells them to ask themselves if it will help to go to the other side or not, and says "more often than not" it is.

2.05pm: The Leveson inquiry has resumed.

Davies is now talking about "binology" – a reference to a practice used by a man who sold stories to Fleet Street based on documents he found in people's bins.

He gives an example of Jonathan Aitken and information obtained allegedly by Benjamin Pell.

Davies refers to a book writen by Mark Watts about Pell, a man known in the newspaper industry as "Benji the binman".

2.01pm: Labour MP Chris Bryant has just tweeted this from the BSkyB annual general meeting:

@tom_watson asks JM whether BSkyB whether they ever paid for private investigators. They are investigating

1.51pm: Alan Rusbridger, editor-in-chief of the Guardian, has been tweeting through Nick Davies' testimony.

You can follow him here @arusbridger

Davies: Mulcaire "facilitated" hacking. His understanding is it was NotW journalists who deleted Milly messages #leveson

1.28pm: We now have a full story about James Murdoch's re-election as chairman at the BSkyB annual general meeting.

1.24pm: Here is a lunchtime summary:

• Guardian investigative reporter Nick Davies alleged that News of the World journalists intercepted messages on Milly Dower's phone.
• He described private investigator Glenn Mulcaire as a "brilliant blagger" but said he only acted as "facilitator".
• He said he no longer supports self-regulation of the press.
• Former Daily Star reporter Richard Peppiatt apologised to the family of Matt Lucas's ex-partner and others for stories he made up.
• He said reporters on tabloids were "cannon fodder" for proprietors and he was threatened after he started to speak out.

1.05pm: The inquiry is now breaking for lunch and Davies will be in the chair again after lunch. His evidence is expected to continue until 2.45pm, when News of the World's former features editor, Paul McMullan, will appear.

1.01pm: Robert Jay QC says Davies also refers to a Sunday Times reporter, David Connett, who took the paper to an employment tribunal.

He also refers to someone on the Sunday Telegraph in relation to Dr David Kelly who killed himself after being outed as Andrew Gilligan's source for the "sexed-up" Iraq dossier.

Davies claims Lord Ashcroft and Lord Levy both had their tax records blagged by someone who appeared to be working for the Sunday Times.

1.01pm: One expert blagger told him that he was working for the Sunday Times, but this goes back to the late 1980s, says Davies.

He is one of the senior figures, if you like, who doesn't like the way it all took off.

12.57pm: Davies says it was "absolutely clearly" known where the cash was going; there was a clear indication of who it was "Z" was passing the money to.

He says it is fair to say the Daily Mail (whose former reporters were referred to earlier in relation to "Z") was not alone in paying for stories.

The Mail are not alone in their relationship with 'Z', as I said I think it was casual and widespread.

12.55pm: Davies is talking about the prosecution of "Z" and says Fleet Street may have celebrated when he was acquitted.

When Scotland Yard attempted to stop him they mounted a prosecution … the trial aquitted him … there was coverage that crime reporters across Fleet Street would be celebrating. It's fair to say he was involved over a number of years in casual activity, carrying cash from newspapers to police officers.

12.53pm: The new material led Davies forward with his story.

Davies says he picked up "hints of blagging; hints of voicemail intercepts; hints of email intercepts; hints of phone hacking; hints of burglary; and hints of corruption of police".

He also knew that journalists would carry around cash for stories and that the police were frustrated because active inquiries into crimes were impeded by the the sale of information.

12.52pm: Davies is being asked about paragraph 271 in his evidence in which he claims that by the mid-1990s Fleet Street was hiring several dozen individuals and organisations including an individual in Ruislip to obtain ex-directory numbers, itemised phone bills and other material from confidential databases.

Davies said the individual from Ruislip was brought to trial and the public information relating to the case, combined with the first Motorman investigation, was another source of information.

12.50pm: Davies is now talking about an individual "Z" whose activities Scotland Yard was attempting to stop. He then got a briefing from the Yard.

Davies says that "Z" was working on behalf of Fleet Street from the early 1980s until the very recent past; he was still active at the time Flat Earth News was being written.

He says this Yard briefing, along with material in the public domain and human sources, were the basis of his stories on phone hacking.

12.47pm: Breaking news from the BSkyB annual general meeting.

Mark Sweney, our media business reporter, has just tweeted this:

81.24% in favour of Murdoch reappointment. Murmuring around room

and this:

James Murdoch reappointment resolution. 18.76% against

12.45pm: Davies asks whether Leveson has access to the raw material the information commissioner had in relation to Whittamore.

"I don't normally answer questions," quips Robert Jay QC. "It is normally the other way round," adds Leveson.

Davies says he merely asked because he has had access and is surprised there were no prosecutions.

Jay confirms now that the inquiry has seen the documents in relation to Whittamore.

12.40pm: Davies is talking about the chapter in his Flat Earth News book called "The Dark Arts". Davies says he used two reports on Operation Motorman, Freedom of Information requests and direct contact with "two members of the [private investigator Steve] Whittamore network".

He said he "pestered" the information commissioner repeatedly to get information.

12.39pm: Davies' written statement expands on the reasons why he felt it would be a breach of privacy to publish a story about a former minister's phone being hacked.

The raw material for that story included details of messages which had been exchanged between him and a woman friend. I argued that we should not publish those messages - they were intrusive, and it was perfectly possible to expose the important point, that this minister had been a victim, without breaching his privacy.

The same kind of balance was raised by the story of the hacking of Milly Dowler's voicemail which I brought in in July 2011. I was sure that it was a matter of public interest that should be revealed, but I had some concern that publication would breach the Dowler family's privacy by exposing them to yet more publicity.

12.36pm: Davies explains how he used the Freedom of Information Act three times to extract information about the investigation.

12.34pm: Davies is now being asked about the police investigation into phone hacking back in 2006.

He says the Crown Prosecution Service began its investigation in January 2006 by analysing phone company records. This produced a vast amount of information but the prosecutor and police decided not to go ahead.

Davies is asked how he knows this; he replies that "a good human source showed me the paperwork".

12.32pm: Davies tells the hearing of a PCC report of November 2009 exonerating newspapers of phone hacking.

The report was terrible, just an awful piece of work. My editor resigned from the PCC editors' code committee over it; he went on the radio and said 'This is worse than useless.'

I do not trust this industry to regulate itself. I love reporting, I want it to be free. We're kidding ourselves if we think it would work, because it won't.

12.31pm: Davies says he no longer supports the concept of self-regulation of the newspaper industry. He says the press isn't capable of keeping its own house in order.

The history of the PCC's performance undermines the whole concept of self-regulation, and re-reading this evidence I realise I was sticking up for self-regulation but I wouldn't any more.

I don't think this is an industry which is interested or capable of self-regulation.

Nick Davies broke the story about Milly Dowler's phone being hacked 12.28pm: Davies is asked if he knew who hacked into Milly Dowler's phone.

He says the "facilitator" was private investigator Glenn Mulcaire. Mulcaire was "a brilliant blagger" and could get the information from the phone company.

He says Mulcaire didn't actually listen to the messages himself – most of that was done by the journalists themselves.

If you asked who hacked Milly's voicemail, the answer is it was one or more News of the World journalists who then deleted the voicemail messages.

The facilitator was Glenn Mulcaire. There is a misunderstanding, I think, around the way that he operates.

He does not actually, on the whole, do the listening to the messages himself. Most of that is done by the journalists themselves.

Mulcaire's job was to enable them to do that where there's some problem because he's a brilliant blagger, so he could gather information, data from the mobile phone company.

Occasionally, I think, he did special projects - I think perhaps the royal household would be an example.

Davies is now talking about the July 2011 revelations in the Guardian that Milly Dowler's phone had been hacked.

He said he hestitated about the story, particularly the impact it would have on the Dowler family. However, he sent a warning through Surrey police to the family.

What we were disclosing was so important we needed to find some way of getting it in to the public domain. On the other hand, the family had been through hell. We sent a detailed report through Surrey police to say what we were reporting.

We did what we could to soften the impact by sending that detailed warning.

12.23pm: Davies says the Guardian was offered a story about a former cabinet minister whose voicemail was hacked. He felt it went too far in terms of a breach of privacy. The reporter asked Davies what he thought and he said he felt the paper shouldn't rebreach the privacy that was breached in the first place.

12.22pm: Davies says that he has competed before with tabloid journalists and they "bring out the chequebook". He says they get the first two pages of the story, but he gets the chapter.

12.21pm: Davies says he has never paid a source for information and has never experienced the Guardian paying a police officer for a story.

I think it's a practical question. The key thing we have to do is to motivate people to talk to us. The way to do that with success is to build a relationship and motivate them … it's the most exciting thing in reporting.

12.19pm: Davies continues:

What I am arguing for is journalism doesn't begin with checking facts, there is a stage of selective judgment prior to that; what story should we cover … this is highly subjective.

Davies says he is "not exempting the Guardian" from the problems that Peppiatt was talking about in terms of a groupthink surrouding the veracity of a story.

Davies refers to a story the Guardian ran in 2008 which claimed charred remains from at least five children were discovered in the cellars of a former children's home in Jersey.

Davies said the quotes from those supposedly confirming the story did not stand up to close scrutiny.

These are the problems that occur in all newspapers - it's too good a story to knock down. The reporter who rings up and says 'This is crap, there is no evidence for this at all,' they will not be thanked.

12.12pm: Davies says the Guardian's ownership structure, which involves a trust, distinguishes it from the Daily Star and the type of culture created by a single proprietor, as described earlier by Richard Peppiatt.

He adds:

The broadsheets rely far more on advertising space to get their income. It's the popular papers where that competitiveness passes down the ranks…

Broadsheets have less commercial imperative; they still have to sell copies, but not as many copies.

Palace asked for media blackout on Prince Harry in Afghanistan 12.09pm: Davies now turns to another example three years ago when there was a media blackout on Prince Harry's tour of Aghanistan.

Before he went the army, the Palace called in newspapers and asked them to for a media blackout.

Newspapers agreed not to publish it, on the basis that if we did it would bring down extra fire on him and his squadron and we didn't want to be responsible for that.

On the other hand it meant we were colluding in a PR story: 'Harry the Hero'.

12.06pm: The counsel for the inquiry, Robert Jay QC, asks Davies for a concrete example of public interest difficulties. Davies says the Guardian had "a huge problem with the WikiLeaks stuff".

Davies had persuaded Julian Assange to work with the Guardian, New York Times and Der Spiegel on the leaks but "it rapidly became apparent that it contained information that could get people on the ground in Afghanistan seriously hurt".

It was absolutely clear we couldn't publish that information but he did.

12.03pm: In relation to the public interest, Davies says:

I profoundly disagree that the News of the World had a public interest in publishing the story about Max Mosley's sex life.

12.03pm: Davies's written statement to the inquiry has now been published.

12.01pm: Davies says in paragraph six of his statement that the concept of public interest can be particularly "slippery".

Expanding on this, he says in operational terms it's difficult because it's hard to tell where the lines are supposed to lie.

The answer is it would be all right if it's in the public interest but we are stymied … very often it isn't clear and personally I would like it if somebody said up a public interest advisory body that I, or a member of the public, could go to and could get high quality advice.

In the advent of a dispute I would be able to provide the advice and say 'this is what I was told'. I would have something that was weighty in the event of a dispute.

11.59am: In paragraph five of Davies's witness statement he says the Guardian has a clear code of practice in relation to ethics.

The Guardian has its own code and the PCC code is part of it, as an appendix. The NUJ code is less often referred to, but in terms it's more or less the same.

11.58am: Davies says he accepts that it is frustrating for the inquiry that he cannot talk about his sources in any further detail, which means there will be a gap between what he knows and what he can discuss openly.

11.55am: Robert Jay, counsel for the inquiry, also goes down this line – how many people did Davies talk to before you validating the claims outlined in his book.

He says a dozen, in relation to each newspaper title. "It doesn't mean in relation to each allegation you have 12 to 15 sources, but you are going to have more than one."

11.54am: Leveson asks Davies "How many people do you need to validate the conclusions you've reached as opposed to an individual person who comes and says 'X' and someone says 'no, that's not true'?

Davies says:

I would say a loose assembly of between 15 and 20 News of the World journalists who have talked on condition of anonymity to me or a researcher. They have been a tremenduously important engine in driving the story forward.

In addition, he says there are about a half a dozen others in the industry who have been very important.

There is a third pool of sources - the victims. There are also private investigators and people "close to the police".

11.50am: He says one of the first things sources seek is complete anonymity. They may be worried they will lose their job, or be beaten up.

There is a culture of bullying in some Fleet Street papers – it's real.

11.48am: Davies says two of the key routes to finding a story are the public domain and talking to people.

An old newspaper maxim, he tells Leveson, is "News is what someone somewhere doesn't want you to know".

Davies adds: "The interesting thing is finding human sources and persuading them to help."

He says the former Sunday Times editor Harry Evans got his journalists to persuade people to sue. If there were legal actions ongoing the judge might order disclosures which would help the journalist uncover the truth.

11.42am: Davies was not taught about journalistic ethics during his training. "This was a tabloid training scheme," he says.

He was very interested in distortion in the media and the research meant he had to go to reporters on other newspapers. Those reporters started talking to him about illegal methods of obtaining information and this was reported in the the chapter of his book Flat Earth News titled "The Dark Arts".

He was then on radio with Stuart Kuttner, the former managing director of the News of the World, who insisted he didn't know what he was talking about.

This confrontation provoked someone he had never heard of to contact him with information and, over the next 18 months, he worked part time on the story, culminating in the revelations in July 2009 about Gordon Taylor's payout from the publisher of the News of the World, Rupert Murdoch's News Group Newspapers.

11.39am: Davies talks about his training. The Mirror Group had newspapers in Devon and Cornwall where he was taught reporting, typing and law. If you passed a proficiency test, you were sent to London on an attachment.

He was keen to work on the Sunday People, which was very different from now and did some "heroic" reporting on the police.

He was bullied by a member of staff there and left.

Leveson inquiry: Nick Davies 11.39am: The Guardian's Nick Davies is now talking. He is freelance, working part time since 1989. He was a staff reporter before that.

Ocassionally he makes documentaries and he is currently writing a book about phone hacking.

He wrote a book, Flat Earth News, which was published in January 2008.

11.32am: Peppiatt's witness statement is now available online.

11.30am: The inquiry is now having a five-minute break.

11.29am: Peppiatt accuses Northern & Shell of trying to smear him in a bid to stop him speaking out against the Daily Star.

He returns to the subject of whether his phone had been hacked and says the person who is intercepting his messages is "not on the payroll of Northern & Shell" but it seems to him "very very likely" that he got this information from Nothern & Shell.

I look at the motive and where is the motive to try and get me to shut up? I know exactly where the motive is.

Generally for the last nine months there's been an attempt to blacken me behind the scenes.

Rumours about myself have been fed into the rumour mill of Fleet Street, much of it untrue. It's attempting to discourage others not to speak out … 'we will make it as hard as possible to criticise others'.

11.26am: Peppiatt is now talking about a story when Katie Price – AKA Jordan – appeared in public without a ring on her finger. The story that appeared referred to her "marriage being on the rocks". He said that one fact was all he needed, but when you have to stretch the story to 700 words "you have to draw a lot of inferences, speculate".

11.20am: He did not raise his concerns with Dawn Neesom, the then editor of the Daily Star.

There is no avenue to make complaints. The structure is you are complaining to the very person you are complaining about.

You either take it on the chin or you leave. I do question my own moral judgment and the fact I stayed as long as I did, but there are so few jobs for reporters in the current climate … that once you've got full-time work you have to think very carefully about packing it in.

11.19am: Peppiatt is asked what rights he had not to show up at the Daily Star, given that it was such an awful workplace.

Turning to the inquiry's QC, Robert Jay, he says: "The same right as you, I suppose, as a human being with free will."

But he says "it's very powerful organisation who kick downwards at people who are easy targets".

11.18am: Peppiatt says he found Daily Express editor Hugh Whittow's evidence to a parliamentary committee yesterday "callous".

Whittow was asked about libellous headlines about Bristol landlord Chris Jefferies and told the committee that the press had put its hands up after getting it wrong and moved on.

Well Chris Jefferies doesn't move on. His life has been irreparably changed.

11.12am: Peppiatt says he went into the industry with his eyes open.

It's not a nursery school, I'm not complaining. However I think it's useful to the inquiry to know that we are cannon fodder on the front line …

We get the flak because it's our byline about it, but we are just following instructions.

11.11am: Peppiatt suspects his phone was hacked following a strange incident when a friend phoned to tell him he could not make a football match they had arranged to watch.

He couldn't make it and left me a voicemail message. I then received an email an hour later … I never got the message. I never got the voicemail. This is circumstantial, but to this day I don't know how I never got those messages.

Peppiatt says that police traced the source of this harassment back to someone "linked to the tabloid world, long established" but he can't name them for legal reasons.

11.11am: Peppiatt says other strange incidents occurred.

In the days after I resigned one of the news editors emailed me asking how the doctors went … references about my CV … and to a sitcom I was working on … and to the Guardian reporter Paul Lewis who I'd been working with on this story.

11.09am: He is now talking about the day he resigned. He leaked his letter of resignation to the Guardian but quickly started to get threatening and menacing text messages from unknown quarters.

He initially thought that they had leaked his number to the English Defence League, but these people knew where he lived and knew his phone number.

The messages included "You're a marked man until the day you die", "RD will get you" and "We're doing a kiss and tell on you".

It worried me enough to get my girlfriend move out for a couple of days, because I didn't know where it was coming from and the frequency, all through the night, I thought it was best we wait until this cooled off.

11.04am: Here are two of Peppiatt's made up stories, one about Kelly Brook hiring a hypnotist, the other about "Muslim-only loos".

Daily Star Kelly Brook story Daily Star 'Muslim loos' story 10.59am: Peppiatt now details how he completely made up a story on a bomb plot.

He says the inspiration for the newsdesk was "a line" in the Sunday Telegraph that "Muslims may be wanting to disguise themselves as Sikhs and hide bombs in their headdress".

He explain that he then phoned the police.

They said: 'Never heard of it, never heard of it all.' How it should work, is that that kills it – you can go over to your newsdesk and say, 'Maybe the Sunday Telegraph have got this wrong, I can't stand this up' and you move on.

Instead what you do is 'a security source said' and you make up a quote for a pre-ordained line and then you ring Inderjit Singh [a Sikh representative] and add a veneer of legitimacy by telling them something you know is not true and get a quote.

10.54am: Peppiatt says there was another casual reporter who expressed disquiet. Bosses then made her life miserable.

She was given every anti-Muslim story to write for about two weeks, so as a result of that she quit. I'm deeply ashamed to this day that I didn't walk out with her.

That's the atmosphere: you toe the line or you get punished.

10.48am: Peppiatt tells the inquiry there is an important difference between the legal sense and the moral sense of truth.

He says the tabloid press have no interest in the moral sense.

If one newspaper pushes the line, everyone rushes to fill the void behind them.

I'm sure I'll be lambasted by some tabloid editors for saying that. But I'm sick of [tabloid editors] stepping forward and going 'moral considerations are at the forefront of our mind', because they're certainly not.

Susan Boyle. Photograph: Ken McKay/Rex Features 10.42am: Peppiatt issues another apology for his work – this time to Britain's Got Talent's Susan Boyle.

He explains how he had to follow her after she shot to fame on the ITV show.

I overstepped the mark with harassment. She was on The X Factor [sic] and she was finding the pressure quite overwhelming. I think she has some sort of learning difficulties and she was not prepared for the huge media ingterest surrounding her … She was acting in a bizarre manner and often this was after provocation [by the press] … she was lashing out …

She was whisked away from the press by Britain's Got Talent but this was "like a red rag to a bull", explains Peppiatt, who was then dispatched to Scotland to try and find her.

He was told to get a kilt and roses and try and propose to Boyle and this culminated in a mock proposal. Her reaction was "piss off".

"Yet again I can only apologise for my part in that," says Peppiatt.

10.38am: Peppiatt has issued an apology about the Star's coverage of death of Kevin McGee, the ex-partner of Little Britain comic Matt Lucas.

He tells Leveson he wrote about Matt Lucas and his ex-partner after he got a call from a member of the public saying they had information on their breakup, and they couldn't meet up but would have to take his word for it. The Daily Star news desk told him to "just write it up", Peppiatt claims. Matt Lucas later sued for breach of privacy.

[I said to the desk] 'Surely I need to meet the man first.' It was 'just write it up', so there was a front-page story about him spending a lot of money on drugs before his death. Certainly there was a [feeling] if he is dead, you can't libel the dead … you can say pretty much what you like about him because he is dead.

That is the callous perspective on him and I would like to apologise to Kevin McGee's family. I accept responsibility that nobody held a gun to my head and made me write that story.

I feel very ashamed.

10.36am: The first two weeks of August there were 40 stories about the Big Brother and the Health Lottery dominated the front pages. This is purely advertising their own stories; it is not about journalism.

10.36am: Peppiatt says Express and Star owner Richard Desmond uses his papers as vehicles to promote his own products including Big Brother which is on Channel 5, the station the Express proprietor now owns.

10.35am: The PCC upheld a complaint about the Muslim-only loos.

Peppiatt said he was surprised that it went this far because the PCC does not entertain "third-party complaints".

It is certainly a massive flaw in the PCC anyone can't complain. If you are a Muslim and offended by that story they will say 'sorry, I don't see how it affects you directly.' That's pretty disgraceful really.

10.33am: Lord Justice Leveson asks: "These are real headlines?" to which Peppiatt says "yes".

Daily Star Susan Boyle headline 10.30am: Peppiatt now raises a laugh as he gives examples of Daily Star headlines that he says were made up:

Chile mine to open as theme park

Angelina Jolie to play Susan Boyle in film

Bubbles to give evdence at Jacko trial
Jade is back in Big Brother (she was dead at the time)

"We've obviously had the Maddy in the freezer story which you have heard of already."

Grant Theft Auto Rothbury

Brittany Murphy killed by swine flu

Macca vs Mucca on Ice

Muslim-only public loos

The latter, Peppiatt says, "was completely untrue as well".

10.27am: There are certain days he would be asked to do eight or nine stories a day so there was no time for investigations.

10.26am: Peppiatt tells the inquiry that quite often a story would be changed and the line that kept it on the right side of accuracy or truth would be removed by a subeditor who wasn't familiar with the story.

Sometimes you would cringe and go, (intake of breath), 'That was a bad line to take out' …

Don't think just because a reporter's name is on the top of the story that they had any word in how it turned out.

10.25am: Peppiatt on paying for stories:

In all tabloids there is what we call 'a come on', it will say we pay for tips and information and a phone number to call. Most of the time it's rubbish but there would be an occasion when good stories would come through. The first thing they would ask is 'How much can I get?'

The minute you introduce this incentive people go, 'Maybe I should flam this up a bit.'

10.24am: He gives Leveson an example: a travel story. He may get a press release with statistics on holidays and a company such as Travelocity might get mentioned in the story.

10.22am: Peppiatt on the role of PR agencies:

PR is a huge influence. There are more PRs than there are journalists. You get into your inbox every day dozens and dozens of press releases from companies all trying to get their brand in the paper, get mentioned. [They are] Incentivised, I had three or four holidays from PR companies in order to get their stories an extra push.

10.19am: Peppiatt on the truth and tabloids:

This [the Daily Star] is not a truth-seeking enterprise; much of tabloids are not truth-seeking – it is ideologically-driven and it is impact-driven. 'How is the most aggressive way we can package this story and help sell the paper?'

10.18am: Peppiatt on the Daily Star and private investigators:

The Daily Star did not really use private investigators. I don't think that's an ethical decision, but a financial one. They've got a smaller budget than their rivals and often they were happy to follow up on stories of their rivals.

10.17am: Peppiatt tells the inquiry that as far as he knows the Daily Star did not use private investigators.

However he recalls a day when there was a rumour that Steven Gerrard had got a 16-year-old pregnant and he was sent up to Liverpool to establish the truth.

He needed some assistance and he called up "a senior person" and they came back with a list of addresses and phone numbers to call.

He admits there may not be anything illegal about this but claims the list of addresses and numbers was more than typically available on a service like Tracemark, which aggregates information publicly available on telephone directories and so on.

10.13am: Peppiatt says that the PCC code was not discussed.

It was just not something that's brought up in reference to stories. There are implicit considerations - you don't go barging into hospitals - but certainly there was never a discussion that I remember on 'how should we run this story in relation to the PCC code?'.

The Daily Star is a rightwing tabloid … you must try and adhere to that ideological perspective. If there is a government report out with statistics, any statistics that don't fit, you ignore them. If knife crime has gone up and the rest of crime has gone down, you just do knife crime …

There is an overwhelming negativity and it runs throughout the press. A story is not a story unless it is knocking someone … or knocking an ethnic group, whatever it may be.

10.12am: He says there was nothing said about the Press Complaints Commission guidelines, nor were they included in the terms and conditions of his contract.

10.11am: He tells Leveson that being a freelancer at the Daily Star was quite typical of the industry. He was paid on a daily rate and a weekly rate.

He was paid £118 a day for an eight-hour day. For any hours over that, he might get paid extra - £136 for nine hours and £140-plus for 10 hours.Anything over 12 hours was double pay. Occasionally he would get a bonus, he says.

10.09am: Peppiatt is now running through his journalistic career. He started at Splash News in Los Angeles and returned to the UK and went to university and did the NCTJ journalism training course.

He was a freelance reporter on the Mail on Sunday, sometimes working for a week, sometimes for a day. This lasted for four or five months in 2008-09.

He then worked for the Ferrari news agency for six months and finally got a job with the Daily Star, where he worked as a freelancer for two years.

10.01am: Richard Peppiatt is now giving evidence.

10.01am: Associated Newspapers has submitted a written undertaking aimed at protecting its employees if they choose to give anonymous evidence to the Leveson inquiry.
In a document on anonymous evidence published by the inquiry yesterday – but which appears to have got lost in the flurry of interest around Charlotte Church and Anne Diamond – the counsel Associated, Jonathan Caplan QC, writes: "...nothing which any employee of ANL provides to the Leveson Inquiry by way of evidence, whether orally or in writing, will be used in subsequent disciplinary proceedings against that employee or against any other employee of ANL". However, the undertaking has some important caveats: it does not apply when allegations of misconduct arise that are "so serious that it would justify dismissal for gross misconduct" and is also exempted when the witness is charged with misleading the inquiry.

So, Associated Newspapers retains the right to sack or discipline employees whose evidence raises serious allegations of gross misconduct against them.

Leveson inquiry: Richard Peppiatt 9.59am: Richard Peppiatt, the Daily Star reporter is up first, James Robinson tells us.

9.58am: Dan Sabbagh, James Robinson and Roy Greenslade will be following proceedings down at the Royal Courts of Justice.

Your follow him them on Twitter at @dansabbagh and @jamesro47, while Lisa O'Carroll - @lisaocarroll - and Josh Halliday - @JoshHalliday - will be live blogging.

9.43am: While we're waiting for the inquiry to begin at 10am, here's video of Steve Coogan's memorable clash with Paul McMullan as they discussed phone hacking on Newsnight.

9.40am: Welcome to day nine of the Leveson inquiry when the journalist who has been central in exposing the level of phone hacking at the News of the World gives evidence.

The Guardian's Nick Davies revealed in 2009 that the paper had secretly paid nearly £1m to the Professional Footballers Association chief executive Gordon Taylor and two others in relation to phone hacking. Davies and Guardian colleague Amelia Hill also revealed in a July article that Milly Dowler's phone had been hacked, giving hope to her parents that she was alive.

Also up today is the former features editor of the News of the World, Paul McMullan. He was the journalist who Hugh Grant secretly recorded for an interview the April issue of the New Statesman magazine edited by his former girlfriend Jemima Khan.

Grant asked him about hacking and he replied that "it was quite routine".

Despite being one of the few journalists on the paper who have made disclosures about illegal activities, McMullan isn't popular in all quarters.

In a memorable edition of Newsnight in July, Steve Coogan pranded him "risible" and "morally bankrupt".

Also appearing today is Richard Peppiatt, the former Daily Star journalist who claimed he was routinely asked to make up stories on the paper.

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