Rebekah Brooks was accused in court of carrying on a "cover up" over the extent of phone hacking at the News of the World.
The former tabloid editor was repeatedly grilled about News International's line between 2007-9 that it was limited to one "rogue reporter" after royal editor Clive Goodman and private investigator Glenn Mulcaire admitted accessing voicemails.
The former NI chief executive was being cross examined by prosecutor Andrew Edis QC on her ninth day in the witness box.
The Old Bailey heard Goodman and Mulcaire pleaded guilty to hacking in 2006 and were sentenced in 2007, with Mulcaire receiving the heavier sentence.
During the investigation into the pair, Brooks had been briefed by police as a potential hacking victim of Mulcaire.
At that briefing she had been told that Mulcaire had accessed voicemails of between 100-110 people, but police only needed a sample of five for a maximum sentence, the court heard.
Mr Edis repeatedly asked Brooks whether that meant she knew in 2007 that Goodman was not the only member of staff involved at the NotW.
He said: "In fact you knew or believed that the first inquiry proved to be rather superficial and the extent of the hacking that came public in the first inquiry was rather superficial."
Brooks replied: "I did not believe that at the time."
Mr Edis asserted the "rogue reporter" line NI took "was not true".
Brooks replied: "It was believed to be true at the time."
Mr Edis said it was not believed by Brooks because of the information she had from the investigation.
He went on: "You believed NI's behaviour between 2007-9 was honourable, did you?"
She replied: "At the time I did. I had no reason to believe otherwise."
"So you carried on with it when you became chief executive?" Mr Edis asked.
"The cover up," he said.
"No," she replied.
Mr Edis then brought Brooks' attention to the sentencing hearing of Mulcaire and Goodman in January 2007.
"Did you know at the time the reason why Mr Mulcaire got more than Goodman was more crime?"
"Yes," she replied.
"Did you know Mr Mulcaire's barrister said that (hacking) was for others at the NotW?"
Brooks responded: "My state of mind at the time was that Mulcaire had worked for others at the NotW as a private detective, he had been hacking phones in pursuit of stories, and Mr Goodman had been hacking phones."
But Mr Edis said the judge in the case had made it "absolutely clear" that Mulcaire was sentenced to more because he had done phone hacking for people other than Goodman.
Brooks replied: "I understood he had been hacking himself but there was no evidence he had passed any information to other people at the NotW."
Mr Edis asked Brooks if, as editor of the Sun with a particular interest in a story related to her industry, she would have had a reporter in court to provide an accurate report of the sentencing. She agreed.
Brooks, 45, of Churchill, Oxfordshire, denies conspiring to hack phones, conspiring to commit misconduct in public office, and conspiring to pervert the course of justice.
Mr Edis went on to highlight a letter sent to the Press Complaints Commission in March 2007 outlining News International's position following the hacking conviction.
He said it was "misleading in three ways": firstly, that NI had made "strenuous efforts" in the past to ensure it did not happen; secondly, that if journalists broke the law, they would be in breach of contract; and thirdly, that cash payments had to be authorised by the editor or the editor of the day.
Mr Edis asked Brooks: "Would you usually want to know in advance if a criminal offence was being committed by a journalist?"
She agreed. He went on: "Would you allow a criminal offence if you thought it was in the public interest?"
She replied: "If it was in the public interest, yes."
When questioned on the company cash payment policy, Brooks said that in reality there was "some fluidity" when the editor or duty editor were unavailable.
Mr Edis asked if she had ever "specifically" instructed journalists: "Do not hack phones."
She replied: "I did not say that to my journalists ever at either newspaper (The Sun or NotW). No, that phrase I never used."
Mr Edis moved on to Brooks's offer to convicted hacker Goodman of a job on a Diana anniversary "bookazine" in her role as Sun editor.
The move was to avoid a public tribunal after he claimed others at the NotW, including its editor Andy Coulson, were involved, the court heard.
"Did you see any conflict between what you said to the PCC about your attitude to journalists for breaking the law and your offering a job to Mr Goodman who had just got out of prison?"
She replied: "I did not see it like that but I see your point."
Asked if the offer to Goodman was to "shut him up", she said it was "to stop him making unfounded allegations".
Asked how she knew they were not true, she said her boss Les Hinton told her and there were public statements.