* Prosecution says she had known about hacking for years
* Court hears of email exchange with co-accused Coulson
* Brooks denies charges relating to phone-hacking
By Michael Holden
LONDON, March 5 (Reuters) - Rupert Murdoch's former British newspaper boss, Rebekah Brooks, denied on Wednesday she was part of a cover-up to conceal the extent of phone-hacking at one of his tabloids, but agreed she had paid 1 million pounds ($1.67 million) to buy the silence of one outraged victim.
Brooks, who ran News Corp.'s British arm, News International, until 2011, also said she could not explain why the editor of one of its papers had said to her all was "going so well" on the day his royal editor had pleaded guilty to phone-hacking.
Brooks was appearing in the witness box for a ninth day at London's Old Bailey, where she denies charges of conspiracy to hack phones, authorising illegal payments to public officials and conspiracy to pervert the course of justice.
Under cross examination, Brooks was asked why News International had publicly stated phone-hacking was limited to a "rogue" reporter jailed in 2007 until that position no longer became tenable two years later when she became its boss.
"As of that date did you know News International were covering up the extent of the phone hacking at the News of the World," prosecutor Andrew Edis said to her.
"No", she replied.
Edis asked whether she believed the company's behaviour was honourable during this period, to which she responded: "At the time I did - I had no reason to believe otherwise."
Private detective Glenn Mulcaire and former News of the World royal editor Clive Goodman were jailed seven years ago after pleading guilty to phone hacking.
Both admitted hacking phones of members of Britain's royal household, and Mulcaire said he had tapped the phone messages of five other well-known figures.
In a letter to the press watchdog, at parliamentary inquiries and in other public statements, News International said the practice of illegally accessing voicemails on mobile phones was limited to Goodman.
However, in 2011 it admitted others were involved, leading to a new police inquiry. Three senior journalists have now also pleaded guilty to conspiracy to phone-hacking.
Brooks, who edited the now-defunct News of the World from 2000 to 2003, was asked to explain how her ignorance about the extent of phone-hacking fitted in with earlier testimony she gave in which she said police had told her in 2006 that there had been 100 to 110 victims.
That information was given to her by a detective at a meeting in September 2006, before the conviction of Goodman and Mulcaire, because her own phone had been repeatedly hacked by the private detective.
"The suggestion I got from police was they had no evidence to suggest this went wider at the News of the World," she told the jury. "There was no suggestion that anyone at the News of the World knew that information he was providing came from voicemail accessing."
Brooks was also asked to explain an email exchange she had on Nov. 29, 2006 - the day Goodman and Mulcaire pleaded guilty - with the paper's then-editor Andy Coulson, who later became Prime Minister David Cameron's media chief.
The jury were shown the email in which the two were discussing an idea by Les Hinton, then News International's chief executive, to leak to the media the fact that Brooks' phone had been hacked.
"I just don't think it's at all helpful not least as it is all going so well today," Coulson wrote. "Just adds more intrigue and gives papers excuse to get you involved."
Asked what was "going well", Brooks said: "I think it's an odd way to describe the royal editor pleading guilty. I don't know what he was referring to."
Prosecutor Edis put it to her it might be going well "if you thought there had been an agreement ... without anyone else being dragged into it".
Coulson is also on trial, facing conspiracy to hack phones and authorising illegal payments, charges he denies.
Later, Brooks admitted News International had paid high-profile publicist Max Clifford, one of the named victims, 1 million pounds as part of a deal in 2010 to stop his lawyers forcing Mulcaire to reveal who had instructed him on the News of the World.
Edis said this was to "shut him up" and Brooks responded: "Yes, in part", adding it was part of a commercial deal to get stories from Clifford.
"You needed to stop Mulcaire naming anybody else ... because you didn't want the truth to come out," Edis said.
"We were protecting the company by settling with Max Clifford," she replied.
Her trial and that of Coulson and five other continues.