Times editor James Harding has admitted that the paper did use illegal email-hacking to identify the police blogger Nightjack in 2009.
New emails have proven that former Times reporter Patrick Foster used illegal email hacking to identify police blogger Richard Horton - and that he then subsequently used publicly available information to identify Nightjack.
It also emerged today that Foster said in an email that he wanted to delay publication of the story to "leave a little space between the dirty deed and publishing".
The Times later overturned an interim injunction in which it argued that exposing Horton was not an invasion of privacy.
The basis for that legal argument on behalf of The Times was that Nightjack was identified using publicly available information and by "detective work".
Harding today admitted that, in fact, it was email hacking which led to Nightjack's identification.
Harding told the Leveson Inquiry today: "In the last couple of weeks I've learned a great deal more about what happed in this incident. As editor of the paper I'm responsible for what it does and what its journalists do.
"I want to say at the outset I sincerely regret the intrusion into Richard Horton's email account by a journalist in our newsroom. Mr Horton and other people expect better of The Times, so do I. On behalf of the paper, I apologise."
Harding revealed that he has also written to Mr Justice Eady, the judge hearing the interim injunction case, to apologise for the fact that he was misled and not told that The Times had hacked Nightjack's email account.
It emerged today that the first Harding knew about the Nightjack affair was on 5 June, 2009, by which point the paper had already been to court to fight the interim injunction.
At this point, Harding made clear in his evidence today, he said he realised there was a problem with Patrick Foster's "behaviour". But he indicated that at this point he did not realise that Foster had hacked Nightjack's email account.
Robert Jay QC for the Leveson Inquiry asked Harding why at this point Mr Justice Eady was not informed of Foster's actions. Eady had, at that point, yet to issue his ruling.
Jay said: "Had he been told that his reaction might have been rather different. He might have exploded."
On 14 June, Eady ruled in The Times' favour that it was in the public interest for the paper to expose Nightjack's identity.
Explaining the decision to then publish the story, Harding said: "I took the view this was in the public interest." But he admitted that at this point it was clear to him that "we have a behavioural problem with one of our reporters". He added: "The way it had been presented to me was there was concern about Mr Foster's behaviour but that he had identified him through legitimate means. On that basis I took the decision to publish."
Material given to Leveson by News International today included a warning letter given to Foster in around June 2009. Foster was disciplined for "gross professional misconduct", Harding later said.
In the letter, the then Times managing editor said: "By your actions The Times was placed in a position where it had to run the story despite the misgivings of senior editorial staff about its merits.."
Expanding on this point, Harding said: "We felt that having taken up the court's time we had little choice but to publish."
Jay said: "At no stage did anybody suggest to you that this matter ought to be brought to the attention of Mr Justice Eady?"
Harding said: "As I said, Mr Brett [then Times legal manager] did not believe the court had been misled. When I read those documents [over the last week] I felt information should have been disclosed to the judge...I've written to the judge to apologise."