Thousands of politicians and celebrities were allegedly targeted
The newspaper publisher News International paid £1m in three court cases after News of the World journalists were accused of involvement in phone hacking, it has been claimed.
The Guardian alleges journalists hired private investigators who obtained information illegally on thousands of people and that the police knew about it and did not act.
The allegations have sparked outrage both from those allegedly targeted, and from media insiders. Here are some of their responses.
Mr Neil is a former editor of the Sunday Times which is published by News International.
"I'm shocked by the scale of it and by the allegations and evidence that they have presented of widespread criminal activity.
"I'm also shocked by the inability of either the police or the courts or the Press Complaints Commission or anybody else basically to do anything about it, basically to collude in sweeping it under the carpet.
"Those who have been on the receiving end of this criminal activity so far have not had recourse to justice.
"Someone has yet to explain to me why getting into the voicemail of [the actress] Gwyneth Paltrow after she's had a baby is in the public interest.
"They were investigating celebrities, they were looking for scandal, they were looking for sexual impropriety and so on. They weren't operating in the public interest and I think that would be an impossible defence."
The Conservative leader has defended his director of communications, Andy Coulson, who was editor at the News of the World at the time the alleged hacking took place.
"It is wrong for newspapers to breach people's privacy without justification. I mean that is why after all Andy Coulson resigned from the News of the World two-and-a-half years ago.
"Of course I knew about that resignation when I gave him a job.
"But I believe in giving people a second chance and as the director of communications he does an excellent job for the Conservative Party and behaves properly and in an upright way in everything he does."
The former deputy prime minister was one of the alleged targets of the phone hacking.
"If these allegations are to be believed, the enormity of it is unbelievable.
"I am actually staggered that Mr Cameron, who employed Mr Coulson, who was the editor at the time through all these allegations, says he's quite relaxed about these allegations.
"I find that staggering... To say he's relaxed about this is just unbelievable.
"He (Mr Coulson) should come before the [Commons culture]committee and explain what he did know. It's time for him to speak out and it's time for Mr Cameron to ask the essential questions that he can certainly find out if he reads the Guardian."
The publicist is another person allegedly targeted by the News of the World.
"If these allegations turn out to be true, then it's something an awful lot people are going to be very unhappy about, and justifiably so, just as I was.
"Why has it just come out? Because according to the Guardian it's come from police sources, so if the police had this stuff, why didn't they act on it?
"What I am considering doing is let's see what evidence there is, let's make absolutely sure that what is in the Guardian is 100% true, what proof there is, and then obviously I've got to consider my options.
"You need to make sure that it never happens again because it totally exceeds the power of the media. A free press is vitally important in a democracy, but this is far too much."