The News of the World's former royal editor accused a company lawyer of offering a "crude carrot and stick" Online Deals which would see him keep his job if he did not allege others were involved in phone hacking, the Old Bailey has heard.
Clive Goodman, testifying in the phone-hacking trial on Wednesday, also accused the News International lawyer of trying to "dictate lines of defence" following his arrest on suspicion of phone hacking in 2006.
Goodman said he found the lawyer's actions "inappropriate and just a bit shocking" and more "threatening" than the prosecution case lined up against him.
He claimed the News International lawyer had effectively ambushed him in a private legal meeting, telling him he would only be sacked if he said others on the paper were involved or knew about phone hacking.
Goodman produced a previously unseen email between himself and his lawyer, Henri Brandman, complaining about a News International lawyer who had gatecrashed a meeting he had had with his barrister in December 2006.
The meeting between Goodman and his lawyers - Brandman and counsel John Kelsy Fry, QC - had been arranged to discuss the case and the mitigation defence ahead of a meeting with the probation service and sentencing.
Goodman had pleaded guilty on 29 November to hacking the phones of members of the royal household but had specifically said the News International lawyer was only to be present at part of the meeting.
He told jurors that the News International lawyer arrived early and sat in on a discussion he had not been invited to.
"We got to the part of the meeting where I said I fully expected to be sacked by News of the World. At that point he interrupted and said that was not the case," Goodman said. "Again, he said it would only happen if you blame others, if you do that, you can't really expect Andy [Coulson, the editor] to take you back."
Following the meeting on 12 December 2006, Goodman fired off a letter to Brandman protesting at the News International lawyer's, behaviour describing his presence as "most unhelpful".
"He arrived while we were in full flow to deliver a fairly crude carrot and stick from the NoW," he wrote. "As the newspaper has no voice at our mitigation/sentencing hearing on January 26 I found the attempt to dictate lines of our defence highly inappropriate and just a bit shocking."
He continued: "I do not wish to see any NoW representative at future meetings or for them to receive updates on the progress of the case, or for them to sit with us on the day.
"I felt more threatened by the message he was asked to deliver today than I have been by much of the prosecution case."
Previously jurors heard that Kelsy Fry had advised Goodman that a judge might take "a positive view of someone standing up and taking responsibility for their actions". Goodman said this "echoed" advice he had been given by Brandman.
Goodman in the event pleaded guilty and did not implicate any others in his mitigation statement used ahead of sentencing.
He was sentenced to four months in prison on 26 January 2007. On 5 February that year he was sacked by the News of the World. "I learned of it in a phone call from my wife," he said.
He was released on a tag in late February and in March launched an appeal against his dismissal citing five reasons as to why it was unfair.
Among them was a claim that others on the paper had been hacking phones and had not been sacked, and that the editor and a News International lawyer had "promised on a number of occasions that I could come back to the newspaper if I did not implicate any other staff".
Goodman had an internal appeal hearing on 20 March 2007. He did not have legal representation but said there were "47 inaccuracies" in the notes taken of the meeting by News International and distributed to various parties. Some were so bad as to "reverse the truth" Goodman told jurors.
Little more than a week later he was invited to meet Rebekah Brooks, who was then editor of the Sun. She offered him a six-month contract to work on "bookzines" - glossy supplements on subjects including the 10th anniversary of Princess Diana's death. He was offered £12,500 for the work but felt it was not a "serious job offer".
Goodman told the jury of a second internal hearing on 10 May with the company's human resources chief Daniel Cloke and the News of the World's new editor, Colin Myler. Again, he did not have legal representation but recorded the meeting covertly.
On 30 May 2007, he was formally notified that his appeal against his dismissal was rejected. He then discussed his situation with an employment specialist lawyer Tony Lorenzo, at Lewis Silkin.
Goodman settled with News International later in 2007 after being offered £140,000.
Four years later he was arrested again but told jurors that he gave a no comment interview because of leaks to the Guardian. He read about his pending arrest the night before. "It did not come as a great surprise to me that the police would be turning up the next day at dawn to arrest me."
He said when he was at the police station, he learned during a break that the Guardian had more details of the "green books", the royal telephone directories he was suspected of paying for and the amount he had supposedly paid for them.
"That doubly encouraged me not to give any kind of comment," said Goodman.
Goodman said he initially felt "very sore" about the way he had been treated by Coulson, who was his friend, but that he no longer felt hostile towards him. He said his negative feelings towards him faded in prison which he described as "a good place to think".
Goodman has not been charged with hacking offences but denies two other charges that he paid public officials to obtain royal telephone directories.
The trial continues.