By Michael Holden
LONDON, Feb 28 (Reuters) - Rebekah Brooks, the ex-chief executive of News Corp.'s British newspaper arm, told a London court on Friday she had paid a public official for a story about former Iraqi leader Saddam Hussein planning to attack Britain with the poison anthrax.
Brooks, who is on trial on charges of sanctioning such illegal payments, said she agreed to pay for the 1998 report when she was deputy editor of Rupert Murdoch's Sun tabloid because there was an "overwhelming public interest" to do so.
However, she denies approving almost 40,000 pounds ($66,700)in payments to a Ministry of Defence official for a series of stories for which she on trial. She also denies charges of conspiracy to hack phones and perverting the course of justice.
On Thursday, Brooks admitted she had authorised payments to public officials, something which is illegal, on a "half a dozen" occasions from 1998 to 2009, a period which covered her time as time as editor or deputy of Murdoch's British tabloids, the Sun and News of the World.
Appearing for a sixth day in the witness box at London's Old Bailey court, Brooks said the public official, who was later revealed to be a chief petty officer in the Royal Navy, had called the paper about the threat from Saddam and the deadly poison anthrax.
"They said they had reason to believe ... that the government or the security services were covering up a plot by Saddam Hussein to bring in anthrax into the country for the start of a terrorist campaign attack," she said.
"It was very quickly brought to my attention because it was a public official and they were asking for money in return for information."
She told the court that she was called to Downing Street for a high-level meeting with senior security and political figures who confirmed its veracity.
She said after that meeting she agreed to pay for the story as it had satisfied her criteria that there had to be an overwhelming public interest.
The source for the story was later traced following an investigation into the leak and prosecuted for breaking the Official Secrets Act, she said.
The court was also told how she missed out on one of the biggest news stories in Britain in recent years, a scandal about parliamentary expenses, because she had dithered about whether to pay a public official.
She said the Sun news team had come to her in 2009 to say that full details of lawmakers' expenses were available but it was going to cost a lot of money.
"I drove my news team crazy with my indecision. I should have gone ahead but didn't ... so it ended up at the Daily Telegraph and they did a brilliant job on it," she said.
The revelations lawmakers had claimed expenses for everything from pornographic films and tennis court repairs to moat-cleaning and dog food caused an uproar.
It subsequently dominated the British news agenda for months, leading to the resignation of lawmakers and in some cases their imprisonment.
Brooks, who said it featured "quite high of her list" of judgment errors, noted to the court that neither the police nor prosecutors took any action because of the high-level of public interest.
Her trial and that of six other continues.