Tom Crone, the former legal manager at the News of the World, said that James Murdoch did know about an email that contained “hard evidence” that phone hacking ran to more than one reporter at the paper.
Speaking at the Leveson Inquiry, Crone said he showed Murdoch the “for Neville” email, a reference to Neville Thurlbeck, who is under investigation for hacking.
The investigation heard that the email, which contains transcripts of illegally intercepted voicemail messages, was shown to the News International Chairman in June 2008, in a meeting with the editor Colin Myler.
"I cannot remember whether they were passed across the table to him, but I am pretty sure I held up the front page of the email," said Crone.
"I am also pretty sure that he already knew about it - in terms of it had been described to him already, which I think the other documents that have come out suggest anyway."
The Inquiry also heard that Murdoch was informed that News of the World journalists were implicated in an investigation into the selling of private data.
The “for Neville” email contains key evidence that phone hacking was not contained to one reporter, the stance taken by News International.
"What was certainly discussed was the email - not described as For Neville, but the damning email - and what it meant in terms of further involvement in phone hacking beyond Goodman and Mulcaire," said Crone.