Murdoch paper paid Cameron aide: Report

Allegations now that Coulson maintained financial links to the owner of the influential Sun and Times newspapers is likely to cause further damage.

The BBC said Coulson,who was arrested earlier this year on suspicion of being involved in phone hacking,received several hundred thousand pounds from News International,the British newspaper arm of the News Corp media empire,as part of a severance package that ran in instalments until the end of 2007.

He also received benefits such as healthcare for three years and kept his company car,the BBC said,quoting sources. Cameron’s right of centre Conservative party has long been criticised for being too close to Murdoch.

A spokesman for the Conservative Party said senior party officials had not known about the severance arrangements. Downing Street declined to comment.

Opposition Labour called for transparency on the issue. David Cameron needs to say whether he knew about the payments to Andy Coulson,said Ivan Lewis,Labour’s culture affairs spokesman.

Coulson was specifically asked during a parliamentary committee hearing in 2009 whether he had received any other income when he worked for the Conservative Party,and said no.

Coulson quit his government job earlier this year when police further investigated the hacking allegations. He has since been arrested by police and is facing questions over what he knew about the phone hacking,which was used to secure stories.