Former Daily Mirror editor Piers Morgan told the Leveson Inquiry he does not believe phone hacking took place at the paper under his leadership.

Morgan said he had “no reason to believe” the practice was occurring at the tabloid. He added that he has never been made aware of any evidence of paying police officers while he was at the Daily Mirror.

He admitted private investigators were used “from time to time” at the redtop, but said he was “never directly involved”.

“Certainly all journalists knew they had to act within the confines of the law,” he said.

Morgan edited the Daily Mirror between 1995 and 2004, as well as the News of the World from January 1994 to November 1995.

Speaking to the Inquiry via video link this afternoon, Morgan challenged former Mirror reporter James Hipwell’s written statement that phone hacking was so frequent it seemed like a “bog-standard journalistic tool”.

Morgan said that “not a single person has made a formal or legal complaint against the Daily Mirror for phone hacking.”

He added he did not believe he had ever listened to recordings of what he knew to be illegally obtained voicemail messages.

Being quizzed about his diary entry from January 2001, in which he referred to the “little trick” of being able to listen to mobile phone messages, Morgan said he could not remember who had made him aware of this method.

During questioning by counsel to the Inquiry, Robert Jay QC, Morgan admitted he had listened to a tape recording of a voicemail message from Sir Paul McCartney to Heather Mills, but declined to say how he obtained it so as not to “compromise” his source.

When asked if he was acting ethically, Morgan said, “it doesn’t necessarily follow that listening to someone else talking to someone else is unethical.”

Lord Justice Leveson said he was “perfectly happy” to call Mills to see whether she authorised Morgan to listen to her voicemail.

He was also asked why he said in an April 2007 interview that phone hacking was “widespread”. He replied that “the Fleet Street rumour mill, which is always very noisy and not always particularly accurate, was buzzing loudly”, adding that he felt Clive Goodman, the News of the World reporter jailed for phone hacking in the same year, was “made a scapegoat”.

“I feel sorry for him,” Morgan said.

Describing the industry, Morgan said that editors “know only 5 per cent of what their journalists are doing at any given time”, and that he had only “very occasionally” asked reporters about the sources of their stories.

He described victims’ lawyer David Sherborne’s assertion that he had learned of phone hacking through whistleblower Steven Nott as “absolute rubbish”. He said Sherborne was “massively self-inflating” the importance of the story, and that Nott was “slightly barking” and a leading a “psychotic campaign”.

The Inquiry continues tomorrow, with Hipwell giving evidence.

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