Former News of the World editor Andy Coulson is suing part of News International after it stopped paying his legal fees, his lawyers have said.

Coulson -- who was also a former aide to Prime Minister David Cameron -- was arrested on July 8 on suspicion of phone hacking and bribing police during his tenure at the now-closed tabloid.

He has denied all knowledge of the practices at the newspaper which was owned by Rupert Murdoch's News International.

A spokesman for London law firm DLA Piper, which represents Coulson, said: "We can confirm that proceedings have been issued."

A source close to the matter confirmed that Coulson had taken action against News Group Newspapers, a subsidiary of News International, the British newspaper wing of Murdoch's US-based News Corp.

"It is to do with the termination of payment of his legal costs," the source said on condition of anonymity.

After quitting the News of the World in 2007 when its royal editor and a private investigator were jailed for phone hacking, Coulson went on to become Cameron's communications director.

But he resigned that post in January after he came under pressure over the phone-hacking scandal.

The private investigator, Glenn Mulcaire, also launched legal action against Murdoch's empire in August after it stopped paying his legal costs.

On Friday, a lawyer acting for victims of phone hacking at the News of the World said he had begun moves to take legal proceedings against News Corp in the United States.