The prime minister's communications chief, Andy Coulson, will not be charged over phone hacking allegations (Source: PA)

Andy Coulson, the British prime minister's director of communications, will not be charged in relation to allegations that he was aware of the illegal interception of phone messages while serving as the editor of the News of the World.

The news that Coulson would not face charges was conveyed by the director of public prosecutions, Keir Starmer QC, in a statement released by the Crown Prosecution Service (CPS) yesterday.

The phone-hacking scandal was re-ignited following a story published in The New York Times in September, which contained a series of allegations about practices at the News International tabloid, including the accusation that Coulson was personally aware of the hacking of the phones of public figures.

Starmer said that following a CPS's analysis of information obtained during a Metropolitan Police investigation, it had been concluded that the evidence presented fell well short of what would have been necessary to proceed with a case against Coulson.

"Sean Hoare, who made significant allegations in The New York Times and elsewhere, was interviewed by the police but refused to comment," Starmer said.

"A number of other witnesses were interviewed and either refused to cooperate with the police investigation, provided short statements which did not advance matters, or denied any knowledge of wrongdoing.

"The contents of the reports in The New York Times and the associated reports and coverage are not enough for criminal proceedings unless those making allegations are prepared to provide the police with admissible evidence to support their assertions. None have been prepared to do so."

Scotland Yard's decision to interview witnesses under criminal caution - meaning that they could themselves have faced charges if they disclosed their own knowledge of or involvement in phone hacking - is likely to have played a role in interviewees' reluctance to repeat to police the claims that they had previously made against Coulson.

The suggestion that Coulson was implicated in phone hacking at the News of the World had threatened to cause a major headache for Number 10, given his current role as David Cameron's chief spin doctor.

As well as the allegations made in The New York Times, a former journalist at News of the World told Channel 4 that Coulson had personally listened to messages in his office. Another journalist, Paul McMullan, suggested that it would have been impossible for Coulson not to know about phone hacking.

The decision not to prosecute him does not preclude civil cases from being brought against Coulson or News of the World, and parliamentary investigations are ongoing.

'Is it collective amnesia you have got, Mr Coulson?'

Andy Coulson has been giving evidence in the perjury trial of a former Scottish political leader (Source: David Moir, Reuters)

The announcement came on the same day that Coulson was forced on the defensive while appearing as a witness in the perjury trial of Tommy Sheridan, a former Scottish political leader. Sheridan is contesting allegations that he lied when he sued the Scottish edition of the News of the World for libel and won a £200,000 ($A320,000) payout.

According to The Guardian, Sheridan challenged Coulson over his knowledge of phone hacking, and directly accused the former editor of lying during proceedings.

"Is it collective amnesia you have got, Mr Coulson, or are you just lying?" asked Sheridan, who is representing himself.

"No, I am not lying to you, Mr Sheridan, no. I am doing my very best to answer your questions," Coulson said.

Coulson repeated his previous denials of any knowledge of or involvement in phone hacking, saying that there was "no evidence to support the accusations".

Sheridan also alleged "corrupt" dealings between Coulson and the officer who led the first Met investigation into phone hacking at the News of the World. That investigation was led by Andy Hayman, then an assistant commissioner at Scotland Yard; Hayman later quit the Met and began writing paid columns at the News of the World.

Coulson admitted to having a "not unfriendly relationship" with Hayman, but rejected any suggestion of impropriety.

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