Former News of the World editor Andy Coulson agreed to pay a private detective to “monitor” the phones of three aides to the royal family, a court is told.
Clive Goodman, an ex-NoW royal editor jailed for phone hacking in 2007, told the Old Bailey Mr Coulson approved £500 a week payments to Glenn Mulcaire.
He said he had shown Andy Coulson full transcripts of voicemail messages, telling him Mr Mulcaire could supply the pin numbers needed to access the messages of people they wanted to monitor.
He said Glenn Mulcaire had suggested to him that the information about voicemails had come from the security services, which were already monitoring the royal family’s phones.
Mr Goodman said hacking at the News of the World was carried out on “a pretty industrial scale”, with phones belonging to Mr Coulson and former Sun editor Rebekah Brooks also targeted.
The Old Bailey heard how a phone message from Prince William to Kate Middleton was intercepted and later found on a micro-cassette at Mr Goodman’s flat.
Mr Goodman said he heard a phone message Prince Harry had left for his private secretary, asking for help with his homework.
In it, the prince requested information about the Iranian embassy siege, saying: “Please, please, please, email it to me or text me and I will try to ring you again later.”
Another example of a story Mr Goodman gleaned from hacking was one about Prince William getting drunk at his brother’s passing-out parade, the court was told.
In an email to Mr Coulson in February 2006, Mr Goodman described how cost-effective the project was for producing big stories.
He told him: “A few weeks ago you asked me to find new ways of getting into the family, especially William and Harry, and I came up with this safe, productive and cost-effective way.
“I’m confident it will become a big story goldmine for us if you just let it run just a little longer.”
Mr Coulson denies any knowledge of phone hacking while he was NoW editor, a position he resigned from after Mr Goodman was jailed.
He then became David Cameron’s press chief, joining him in Downing Street in 2010, but resigned again in the midst of the phone calling scandal, which led to the closure of Rupert Murdoch’s NoW.
Mr Coulson and Rebekah Brooks are both accused of conspiring to illegally access the voicemails of mobile phones. They deny the charges.
Messrs Coulson and Goodman deny conspiring to commit misconduct in public office.