Rupert Murdoch, James Murdoch and Andy Coulson face fresh embarrassment after an explosive letter from former News of the World Royal Correspondent, Clive Goodman was published today.

The four-year-old letter was only published on Tuesday, and it claims that phone hacking was “widely discussed” at editorial meetings at the News of the World until Andy Coulson banned any future references to them.

Goodman went on to claim that Coulson said he could keep his job if he agreed not to implicate the paper in court and that his hacking had “the full knowledge and support” of other senior journalists, who he named.

The Murdochs may now be recalled to parliament to give more evidence in the light of Goodman’s letter. Rupert Murdoch said that Andy Coulson knew nothing about the hacking during the hearing.

The letter was published by the House of Commons Culture, Media and Sport Select Committee. One committee member, the Labour MP Tom Watson, said Goodman’s letter was “absolutely devastating.” He added: “Clive Goodman’s letter is the most significant piece of evidence that has been revealed so far. It completely removes News International’s defence. This is one of the largest cover-ups I have seen in my lifetime.”

Goodman’s letter is dated 2 March 2007, soon after he had served a four-month prison sentence. Addressed to News International’s Director of Human Resources, Daniel Cloke, Goodman writes: “This practice was widely discussed in the daily editorial conference, until explicit reference to it was banned by the editor.” He reveals that the paper’s then lawyer, Tom Crone, knew all the details of the case against him.

In another embarrassing allegation, he adds: “Tom Crone and the editor promised on many occasions that I could come back to a job at the newspaper if I did not implicate the paper or any of its staff in my mitigation plea. I did not, and I expect the paper to honour its promise to me.”