“Detective accused in axe murder case of former partner hired by Murdoch editor despite conviction for planting drugs in model’s car brings phone hacker scandal closer to top of News Corp”, would be the headline for this story, New York Times style. Yet it still wouldn’t express the full baroque complexity of the ever-developing News of the World phone-hacking scandal.

Last Friday, the trial of corrupt private detective Jonathan Rees for murder, collapsed after the prosecution offered no evidence. In 2009, Rees was charged with the 1987 axe-murder of his former business partner, a case that has seen six inquiries, massive police corruption and bungling, which eventually made the case untenable.

But for the 18 months of the pre-trial process, Rees’s name could not be mentioned in connection with the News of the World scandal, leaving the picture seriously skewed.

Now revelations that he had worked for the NOW before and after his 2000 conviction for planting evidence — cocaine placed in a car during a messy divorce — fills out the picture. For seven years through the 1990s Rees had bribed cops to obtain confidential information that he then sold on to the NOW. In 1999, Scotland Yard placed a bug in his office as part of an anti-corruption push.

The bug turned up evidence of a constant supply of illegally obtained personal information — none of it with a whiff of public interest — for the NOW, the Sunday Mirror and the Daily Mirror, but it was the evidence-planting for which Rees was sent down.

Following his release in 2005, Rees was rehired as an information source by News of the World editor Andy Coulson.

Coulson, who quit the NOW editorship after royal reporter Clive Goodman went to prison for phone hacking in 2006, has always maintained that he had resigned as a noble gesture — falling on his sword as penance for allowing a “rogue” reporter to run riot.

He was then hired by then-opposition leader David Cameron as his press secretary, before the revival of the phone-hacking scandal forced him to resign once more in January this year, five days before a new police inquiry began.

The story that Goodman was a rogue reporter was believed by no one, but it allowed News Corp to explain away the involvement of another “detective” (really, a fixer) Glenn Mulcaire, who had done the phone hacking for Goodman — and, as it turned out, for many other NOW journalists. The police accepted this story, claiming at the time that they had record of only eight phone numbers being hacked into.

However in early 2010, the scandal broke afresh when FOI requests by the Guardian turned up another hundred or so numbers, and a separate New York Times investigation established that thousands of numbers may have been hacked.

The NYT managed to get former NOW staffer Sean Hoare to go on the record, saying that Coulson had obviously known about the hacking, and that it was standard practice. It also became clear that News Corp was now making out-of-court settlements, with confidentiality agreements attached, and had been doing so as far back as 2008.

By now, the scandal had drawn in the police, whose initial investigation was universally seen as laughable and deliberately negligent, with the former head of the inquiry, Andy Hayman, leaving the force to take a job as a News Corp columnist.

But the 2010 revelations gave them no choice but to re-open the inquiry in late January of this year, in parallel with the Crown Prosecution Service, which is running a review of its decision not to proceed with a prosecution on Coulson, on grounds of “insufficient evidence”. Together with a parliamentary sub-committee on the matter, there are thus now three separate inquiries into the matter running concurrently.

Revelations about Rees’s ongoing employment by Andy Coulson, and predecessor and Murdoch supremo Rebekah Brooks (nee Wade), have come at a bad time for the group, for the people themselves, and for David Cameron, whose decision to hire Coulson — and then be deprived of his influence and connection — may well come back to haunt him.

The scandal has already taken fresh scalps — with NOW assistant editor Ian Edmondson “resigning”  on the day a new police inquiry was announced. The only question now is how far it will go. On Monday, the BBC ‘s Panorama screened a fantastic sting in which a former fixer talked on a hidden camera about hacking phones for the editor of the News of the World Alex Marunchak. The Times responded with a rather desperate attack on the BBC for occasionally using detectives.

News has managed to stay clear of the scandal to date because most celebs have been happy to take a payment from News as compo. Now some, such as George Galloway and John Prescott are keen to push the matter politically. Others, such as Labour MP Tom Watson, have used Parliament to denounce the bullying power of News, and to move the inquiry forward more aggressively.

Should the parliamentary or police inquiry finally have teeth, there is some possibility that Coulson, Wade and others will end up in the dock charged with a serious ticket of crimes (and, of course, innocent until proven guilty).

Rees, after all, was only one detective/fixer working for the NOW. Others, according to a Guardian report, included an information broker, Steve Whittamore, who ran a string of con-men, expert at gaining confidential info from phone companies; and John Boyall, who worked with him, gaining police info. Boyall’s assistant was Glenn Mulcaire, who replaced him as NOW’s go-to guy, after Boyall and Whittamore were convicted in 2005 (a NOW editor was charged but not prosecuted at the time).

Coulson and Brooks continue to claim innocence of all illegal practices — yet Brooks has already admitted to a 2003 parliamentary committee that the paper paid police for information. Asked if it would do so in future, Coulson (also giving evidence) blundered in and gave the impression that they would, although they would “operate within the law”. He was then informed that paying police for information was always against the law.

The answer may come to haunt him, since he is claiming ignorance of what was clearly a mass practice in his newsroom (Whittamore’s records showed that he had dealt with 27 NOW journalists — as well, it must be said, as many from other papers). For years, apparently, the business of the paper went on, without him ever asking a journalist how they got some A-grade info. He will have to hope to hell that everyone else on the hook corroborates that story — and those above him may well be feeling their collars. The scandal has already damaged — without derailing — Murdoch’s attempt to take a majority share in Sky Broadcasting, forcing him to hive off Sky News. He was perhaps lucky that this case did not collapse a fortnight earlier. News Corp will need more of it, in what may be shaping up to be its Watergate.