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The phone hacking scandal engulfing Rupert Murdoch's News Corp threatened to spread to other titles on Friday, as sources said a journalist at the Sun newspaper had been arrested over allegations of police bribery.

News International is expected to pay about three million pounds($4.7 million) to settle hacking claims by the family of murder victim Milly Dowler against the now defunct News of the World newspaper, sources close to the case told Reuters on Monday.

Former senior News Corp. executive Les Hinton is being recalled to testify before a parliamentary committee over a phone-hacking scandal involving journalists at the now defunct News of the World newspaper, a spokesman for the panel said Tuesday.

James Murdoch was aware that another News of the World reporter was seemingly implicated in illegal tapping, despite his statements to the contrary, say two top executives of the now-defunct newspaper. Media executive James Murdoch knew of a damaging piece of evidence three years ago that phone hacking was practiced by more than one reporter at the News of the World tabloid, despite his statements to the contrary, two of his former colleagues said Tuesday.

Andy Coulson, who worked as UK PM David Cameron's adviser, continued to receive payments from the newspaper at the centre of the UK phone hacking scandal, after he had left as editor.

Harbottle & Lewis, the law firm embroiled in the phone-hacking scandal sweeping Rupert Murdoch's News of the World newspaper, has taken the unusual step of fighting back against its former client to preserve its reputation.

A high-profile parliamentary panel investigating phone hacking at Rupert Murdoch’s now-defunct News of the World tabloid released embarrassing new evidence Tuesday that the practice of intercepting voice mail had been widely discussed at the newspaper, contradicting assertions by its owners and editors.

Heather Mills was quoted on Wednesday as saying a journalist at British publisher Trinity Mirror, owner of the Daily Mirror tabloid newspaper, had hacked her phone before she was married to former Beatle Paul McCartney.

British news organizations identified a man taken into custody as Stuart Kuttner, who resigned as managing editor of the News of the World in 2009.

British lawmakers said on Friday it was likely News Corp's James Murdoch would be recalled to clarify details about evidence on phone hacking he gave to a parliamentary committee, following claims his testimony was "mistaken."