By Alex Stevenson
Former News of the World journalist Mazher Mahmood was not aware of phone-hacking when he worked at the News of the World prior to the arrest of Clive Goodman, he has claimed.
The investigative reporter was at the News of the World during the period when, it is alleged, phone-hacking was widespread at the tabloid.
It was only after the arrest of Goodman, the former royal editor, that phone-hacking became the "talk of the office".
"All the fingers were pointing towards the newsdesk," he said, conceding that "rumours abounded" about the extent of the practice.
Mr Mahmood said the process by which potential leads were approved for further investigation was a "lot more informal" at the News of the World than it had been at the Sunday Times, where he had worked previously - and is currently employed.
"I don't believe as a matter of course that people could phone in with fabricated stories and they could get in the paper," he insisted. "There were stringent checks in place."
The session comes on the day of one of the first positive stories for Glenn Mulcaire, the private investigator who has denied being responsible for hacking Milly Dowler's phone.
A newspaper report suggested that the murdered schoolgirl's voicemails could have been automatically deleted and that police detectives were inadvertently responsible.
Their attempt to establish Milly's whereabouts by accessing her mobile account could have led to the messages being erased after a set period - perhaps 72 hours - as was standard practice at the time.
Mr Mahmood, whose evidence was broadcast without video after a decision by Lord Justice Leveson, was questioned about the limits of what he deemed acceptable during the morning session.
He said he had bought child pornography to secure a conviction, insisting: "The end justifies the means."
"Does that mean we go out to rob a bank to show that banks can be robbed?" he asked. "Clearly not."
Mr Mahmood said celebrities were justifiable targets because of their public reputation, which warranted investigation when hypocrisy was suspected.
Lord Justice Leveson asked whether this meant that famous people "have to trade on being wholesome characters". Mr Mahmood replied: "Sure."
News of the World's former chief reporter Neville Thurlbeck also appeared at the inquiry, but did not face any questions about phone-hacking following a decision by Lord Justice Leveson.
"I am determined not to prejudice any investigation being conducted by the Metropolitan police," the judge told Mr Thurlbeck, who has been arrested by officers working on the Met's Operation Weeting into phone-hacking.
Instead he was probed about other controversial activity at the tabloid, including its Nazi sex orgy sting against ex-Formula One boss Max Mosley and an expose of David Beckham's alleged affair with Rebecca Loos.
The latter was justified by Mr Thurlbeck on the grounds that the Beckhams were "making an awful lot of money because they were considered to be a wholesome happily-married unit".
He added: "What we saw was in direct contrast to the image they were cultivating ... we thought it very important at the time to expose that image as a sham."
Mr Thurlbeck offered a passionate defence of journalists working at the News of the World during the afternoon session, calling them "some of the best journalists on Fleet Street" who worked with "great diligence and integrity".
"I was proud to work alongside all of my colleagues. I had enormous respect for all of them," he added.
"There may have been a small caucus of people who gave us a bad reputation. Unfortunately the bulk of those very decent journalists have been tainted by that, and are now finding it extremely difficult to get work."