By Michael Holden
LONDON, March 18 (Reuters) - Andy Coulson, British Prime Minister David Cameron's ex-media chief and a former Rupert Murdoch editor, agreed to fund payments to monitor the phones of royal aides, a former reporter told a London court on Tuesday.
Clive Goodman, the ex-royal editor of Murdoch's now defunct News of the World tabloid, who was jailed in 2007 for hacking the phones of the senior royal aides, said Coulson approved a 500 pound ($830) weekly payment to a private detective to monitor phones of staff working for Queen Elizabeth's grandsons.
Goodman said he had shown Coulson, who has denied any knowledge of phone hacking, full transcripts of voicemail messages. He also said he had told the then-editor how private investigator Glenn Mulcaire could supply the pin numbers needed to access voicemail messages of those they wanted monitored.
Goodman told London's Old Bailey court the deal was agreed initially for two months at a meeting he had with Coulson at the end of 2005 but later extended until both he and Mulcaire were arrested for phone-hacking the following year.
"I said that ... Glenn Mulcaire had offered to monitor three royal phones for us," said Goodman, adding that the private eye would give them numbers used to access voicemails.
"We could monitor them or he could monitor them for 500 pounds a week."
The phones belonged to aides to Prince William and his brother Harry, the court heard.
Goodman said Mulcaire had suggested to him that the information about voicemails had come from British security services who were already monitoring the royal family's phones.
Coulson, 46, edited the News of the World tabloid at the centre of a phone-hacking scandal for four years and has always denied any knowledge of the practice. He resigned after Goodman was jailed in 2007.
He joined Cameron's office after leaving the newspaper, working for the Conservative leader who became prime minister in May 2010. Coulson resigned in January 2011 due to escalating news coverage of the phone-hacking scandal.
The hacking scandal forced the closure of the mass-selling Sunday tabloid and prompted a huge police inquiry.
The scandal also led to a year-long public inquiry into journalistic practices which sent shockwaves through the British establishment as it laid bare the close links between media, police and politicians.
Goodman told the court one story which came from hacking involved Prince Harry asking his aide for help with an essay while he was an officer cadet at military college.
He said he showed Coulson a transcript of a voicemail left on the aide's phone he had recorded and the jury heard email exchanges between the two discussing the story.
"As we know it's 100 percent fact," Goodman said in one email to Coulson.
Goodman also told the court senior journalists working on the paper were involved in hacking on an industrial scale.
One journalist even regularly hacked Coulson's phone first thing in the morning to find out about other reporters' stories, and also targeted Rebekah Brooks, then editor of Murdoch's rival Sun newspaper, to find out what her paper was planning.
Brooks went on to become chief executive of News Corp.'s British newspaper arm.
Both Goodman and Coulson are on trial accused over illegal payments made to police officers in return for telephone directories of the royal household. Coulson and Brooks are also accused of conspiring to illegally access the voicemails of mobile phones.
Four others are also on trial and they all deny the charges.