Former home secretary Charles Clarke has described how he faced false rumours that he was having an affair with his "blonde, attractive" special adviser.
The politician told jurors at the Old Bailey that he "wouldn't dream" of having a sexual relationship with his former aide, Hannah Pawlby, and said he had threatened to sue the Sun for libel if it ran such a story.
Prosecutors allege that journalists at the News of the World (NoW) accessed Pawlby's voicemails in 2005 after hearing a rumour that the pair were having an affair.
Andrew Edis QC asked Clarke: "Was there any truth in that rumour?"
He replied: "Absolutely not. I have never had a relationship of that kind with Hannah. I wouldn't dream of doing so and the suggestion is completely untrue."
Clarke, who was home secretary from December 2004 to May 2006, said he was approached by the political editor of the Sun, Trevor Kavanagh, who claimed he had evidence of the affair and would try to get it covered sympathetically in the newspaper, the court heard.
Clarke said: "I said that there was absolutely no basis for him to have any such evidence as such a relationship did not exist.
"As there was no substance to it at all, I wasn't prepared to discuss it with him and I said that we should just end the conversation, which we did."
Pawlby (pictured above) was also approached by another journalist from the Sun about the rumour.
"She was naturally extremely distressed about this allegation and came to tell me about it," Clarke said. "I decided that I would phone the editor of the Sun – Rebekah Wade, Rebekah Brooks – to make it clear to her that such a story was completely untrue and that in the event that they did publish I would sue for libel."
Brooks, nee Wade, was away at the time so he spoke to a colleague and no story appeared, the jury heard.
Earlier, jurors were shown an email sent by journalists from the NoW features desk, which said: "Lewis (Panther – a journalist) has had a tip that Home Secretary Charles Clarke is having an affair with his blonde, attractive special adviser Hannah Pawlby.
"He got this from a Westminster insider who fancied Pawlby, was going to ask her out and was told 'Don't bother wasting your time, she's with Charles'."
The-then features editor, Jules Stenson, replied to colleagues saying that the story was a "non-runner" because the news team had "a head start".
Answering questions from Alison Pople, representing Coulson, Clarke agreed that he had a good working relationship with NoW employees during his time as secretary of state.
He collaborated with the newspaper on campaigns against bullying and in favour of better compensation for victims of the 7/7 terror attacks while at the Home Office.
Clarke said his involvement in these stories aimed to "influence people's behaviour" and reduce social problems.
But he also said that he had worked with journalists on general political stories "to get understanding and support for government policies".
The jury was also shown an interview Clarke gave in March 2013 to NoW investigative reporter Mazher Mahmood about illegal immigration.
Asked about Mahmood, Clarke said: "He had a reputation – the NoW put him in dramatic situations. He had senstational stories in the paper which were often accurate, sometimes inaccurate.
"I thought it was my job to get the story across."
Clarke said that, although he knew Coulson, to his recollection the then NoW editor had never mentioned the affair rumour to him.
Jurors were played recordings recovered from the home of private investigator Glenn Mulcaire, of voicemails left on Pawlby's phone.
They included two from Coulson – in the first he was heard saying that the NoW planned to run "quite a serious story" about Clarke and that he wanted to speak to him.
Pawlby told the jury she was aware of the false affair claims, and that former NoW political editor Ian Kirby said the rumours had been circulating around the newsroom.
Pawlby said: "There was no truth in the rumour."
She recalled being contacted by a Sun journalist who was working for a political gossip column in around 2006 about the claims.
"She said she had pictures of Charles and I and that we were having an affair and said that they were going to run the story and what did I say to that," Pawlby told the jury.
"I said I wasn't having an affair."
Notes made by Mulcaire, who has admitted phone hacking, included Pawlby's parents' landline number and address, the court heard, as well as the phone number of one of their friends who used to work for MI6.
Her brother's phone number was also included in the notes.
Former News International chief executive Rebekah Brooks, 45, of Churchill, Oxfordshire; ex News of the World editor Andy Coulson, also 45, from Charing in Kent; former NoW head of news Ian Edmondson, 44, from Raynes Park, south west London; and the tabloid's ex-managing editor Stuart Kuttner, 73, from Woodford Green, Essex, are all on trial accused of conspiring with others to hack phones between 3 October 2000 and 9 August 2006.
Former NoW and Sun editor Brooks is also accused of two counts of conspiring with others to commit misconduct in public office – one between 1 January 2004 and 31 January 2012 and the other between 9 February 2006 and 16 October 2008 – linked to alleged inappropriate payments to public officials.
She faces another two allegations of conspiracy to pervert the course of justice – one with her former personal assistant Cheryl Carter, 49, from Chelmsford in Essex, between 6 July and 9 July 2011; and a second with her husband, Charles Brooks, and former head of security at News International, Mark Hanna, and others between 15 July and 19 July 2011.
Coulson is also facing two allegations that he conspired with former NoW royal editor Clive Goodman, 56, from Addlestone in Surrey, and other unknown people to commit misconduct in public office – between 31 August 2002 and 31 January 2003, and between 31 January and 3 June 2005.
All of the accused deny all of the charges.
The trial continues.