Report: News Corp. spied on Prince William

LONDON (Reuters) - The News of the World, the now-defunct tabloid at the center of the News Corp phone-hacking scandal, paid a private eye to spy on Prince William and a host of other high-profile people, the BBC said on Tuesday.

The report, based on an interview with the detective, is yet another damaging revelation for News Corp's British operation and comes in the week Rupert Murdoch's son James will testify for a second time before British lawmakers.

According to former police officer Derek Webb, the News of the World asked him to carry out surveillance on Queen Elizabeth's grandson Prince William, his brother Harry's former girlfriend, former Attorney General Lord Peter Goldsmith and the parents of "Harry Potter" actor Daniel Radcliffe.

"I was working for them extensively on many jobs throughout that time," Webb said according to quotes on the BBC website.

"I never knew when I was going to be required. They phoned me up by the day or by the night... It could be anywhere in the country."

William, whom the report said was trailed in 2006 while in western England, was one of more than 90 people Webb was asked to follow in eight years of working for the paper from 2003 until it was closed down in July.

The prince's office said it had no comment on the story.

"Basically I would write down what they were wearing at the time, what car they were in, who they met, the location they met, the times -- the times were very important -- and I would keep that," Webb was quoted as saying.

Such surveillance is not illegal. The News of the World was shut down this year after it emerged it had widely engaged in the illegal practice of hacking into people's phone messages.

DIGGING FOR DIRT

On Monday, News International, the UK newspaper arm of News Corp, admitted its staff had ordered surveillance of two lawyers representing victims suing the media group over the phone-hacking.

The company described the surveillance of the two lawyers as "inappropriate." It said on Tuesday it would not comment on specific work carried out by Webb.

On Thursday, James Murdoch, chairman of News International, will return to face parliament's culture and media committee to explain discrepancies in evidence he gave at a hearing in July.

Adding to the pressure on Murdoch, Channel 4 News said Webb's work logs showed the paper had hired the private eye for five days in 2009 for surveillance of lawmaker Tom Watson, a prominent member of the committee.

"I can only conclude that this was done to try and get dirt, to try and discredit me as a member of that committee," Watson told the news program.

"That has got profound questions for our democracy, and I would hope that James Murdoch gives a very good explanation of himself before he comes to the committee."

Former senior executives from News International have indicated to the committee that James Murdoch was aware of the extent of the hacking earlier than he had acknowledged.

Until this year, News International had said the practice was limited to one rogue reporter who had been jailed.

Detectives have now arrested 17 people, including former senior News International figures, as part of a new inquiry into phone-hacking and illegal payments to police officers, and say almost 5,800 people were targeted.

Dozens of hacking victims have filed lawsuits against News International, with police still to contact the vast majority of suspected targets, according to lawyers involved in the process.

The company has already paid damages in some of the most high-profile cases, including that of actress Sienna Miller and the parents of murdered British schoolgirl Milly Dowler.

(Additional reporting by Stefano Ambrogi and Tim Castle; Editing by Andrew Roche)