The idea that the voicemails of young royals were being monitored by MI5 would have been "shocking" and "extremely newsworthy", Andy Coulson told the hacking trial yesterday.
The former News of the World editor denied that he ever heard the suggestion after royal editor Clive Goodman and private investigator Glenn Mulcaire were arrested for hacking.
The ex-No 10 spin doctor was being quizzed about an email News of the World managing editor Stuart Kuttner wrote about a conversation he had with Goodman following his release from custody on August 10, 2006.
Coulson's lawyer, Timothy Langdale QC, put it to him: "You were asked questions as to whether Mr Kuttner told you that when he saw Clive Goodman on the 10 August, Clive Goodman had been saying something about getting information from Mulcaire who was getting information from the security services, passing on information by way of intercepting messages.
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"You have given evidence to the effect you were never told that by either Goodman or Kuttner. You also said that if Clive Goodman had said anything to you like that – that Glenn Mulcaire was able to pass on information that he got from the security services who were monitoring messages of the royal family – you would probably have told him, 'that's probably the best story you've ever had'. What did you mean by that?"
Coulson replied: "Had Clive told me that the intelligence services were monitoring the phone messages of Prince William (pictured with Prince Harry: Reuters) and the young royals I would have found this to be a shocking piece of information.
"The idea that MI5 or MI6 were monitoring the royal family would have been a shocking story of interest well beyond The Guardian. I would have been very interested in it and I would have found it to be an extremely newsworthy piece of information."
He added: "Many newspapers would have been fascinated by it, considerably more interested than Her Majesty's relationship with the police over bowls of nuts, if I can put it that way."
Coulson, 46, of Charing, Kent, is accused of being part of a conspiracy to hack phones at the now defunct Sunday tabloid. He is also accused of conspiring with Goodman to commit misconduct in a public office.
All seven defendants in the Old Bailey trial deny the charges against them.
Later, Coulson was described as an "altruistic" man by a doctor called as a character witness in the trial.
Conal Austin, a paediatric cardiothoracic surgeon at Guy's and St Thomas' hospital, said he met Coulson through their wives, who became friends at their children's school in 2004.
Over the years Coulson helped him with fund-raising, including arranging for the News of the World to sponsor a charity trip to Sri Lanka in 2006, the court heard.
The surgeon said: "Andy is very altruistic, in my opinion. I have known Andy for many years. He is a good friend. He is very personable, he is quiet, not brash or boastful in any way.
"I found him to be a mover and shaker. He is a very nice chap. I have never seen anything underhand or deceitful. I have a great respect for Andy."
The trial was adjourned until tomorrow, Friday.
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