UPDATE 3-Murdoch's UK arm denies phone hacking allegations

By Kate Holton and Robert MacMillan LONDON/NEW YORK, July 10 (Reuters) - The British newspaper arm of Rupert Murdoch's News Corp denied on Friday allegations its journalists had hacked into the phones of thousands of public figures, following days of damning headlines. The Guardian newspaper reported earlier this week News International had already paid 1 million pounds ($1.6 million) to settle court cases with three people -- including soccer executive Gordon Taylor -- whose phones were accessed. But the report also suggested journalists at the mass-selling Sunday tabloid, the News of the World, had conspired to hack into the phones of thousands of public figures from politicians to celebrities and sporting bosses. News International finally released a statement on Friday, saying that after a full examination and apart from two already acknowledged cases, the allegations were not true. "It is untrue that officers found evidence of News Group staff, either themselves or using private investigators, hacking into "thousands" of mobile phones," the statement said. "It is untrue that News of the World executives knowingly sanctioned payment for illegal phone intercepts. All of these irresponsible and unsubstantiated allegations against News of the World and other News International titles and its journalists are false." The Guardian allegations grabbed headlines in Britain, where the tabloid press fiercely compete through major scoops on sex, scandal and "showbiz exclusives". Actors Jude Law and Gwyneth Paltrow, Australian model Elle Macpherson and former British deputy Prime Minister John Prescott were among those targeted, the Guardian reported. News Corp chief Rupert Murdoch, who was attending the Allen & Co media conference in Sun Valley, Idaho, refused to address reporter questions about the matter. The Guardian report followed the jailing in 2005 for phone hacking of News of the World royal reporter Clive Goodman and a private investigator Glen Mulcaire, which in turn had followed a long police investigation. News International said apart from these two men, the only other case connecting reporters with gaining evidence from a person's voicemail emerged in April 2008, during the course of the Taylor litigation. POLITICAL SPOTLIGHT It said neither this information nor any story arising from it was published and that once senior executives became aware of the situation, they had acted to resolve Taylor's complaint. "From our own investigation, but more importantly that of the police, we can state with confidence that, apart from the matters referred to above, there is not and never has been evidence to support allegations that News of the World journalists accessed the voicemails of any individual," it said. British police said on Thursday they would not be investigating the new claims after their original investigation over Goodman concluded phone tapping had occurred in only a minority of cases. They were, however, contacting people from the 2005 case to check anyone targeted or possibly targeted had been informed. Despite the police stance, the case is unlikely to go away immediately. Public prosecutors said they would review evidence provided by the police from the 2005 investigation and a committee of lawmakers also plans to re-examine the issue. The Guardian allegations also threw the spotlight on the communications chief of the opposition Conservative Party, Andy Coulson, a former News of the World editor who resigned shortly after Goodman was jailed. Opposition politicians had said Coulson should be sacked, a position so far rejected by Conservative leader David Cameron. (Additional reporting by Kate Holton; Editing by Sophie Hares) Keywords: NEWSCORP WIRETAP/ ([e-mail]; [phone] ; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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