A senior police officer has said The Sun newspaper has been paying "corrupted officials" in "all areas of public life".
Deputy Assistant Commissioner Sue Akers updated the Leveson inquiry into media ethics on the latest in the on-going criminal investigation.
She said evidence uncovered by her officers suggested a "culture" of "illegal payments" at the red-top newspaper.
Dep Asst Comm Akers said payments did not amount to an "odd drink or meal" but "frequent" and "sometimes significant" amounts.
One public official was paid more than £80,000 over a period of years, she said.
Dep Asst Comm Akers also revealed that one journalist received more than £150,000 over several years to pay "sources", some of whom were public officials.
The senior officer said a number of employees from The Sun and police officers - plus a member of the Ministry of Defence and a member of the Armed Forces - had been arrested so far, as part of the investigation.
She said payments appeared to have been made to a number of public officials, from Health to Defence and beyond.
Earlier in the day, singer Charlotte Church tore into the publishers of The Sun over hacking of her phone, destruction of incriminating documents and the "industrial scale of their illegal activity".
Dep Asst Comm Akers added: "There also appears to have been a culture at The Sun of illegal payments and systems created to facilitate those payments."
She suggested that journalists seemed to have been "well aware that what they were doing was unlawful".
The Leveson inquiry also heard about an internal email which appeared to suggest Scotland Yard had assured Rebekah Brooks in 2006 that it was not planning to extend its phone-hacking inquiry to include News Of The World (NOTW) staff other than royal reporter Clive Goodman .
Mrs Brooks, who was editor of The Sun at that time, was apparently told detectives were confident Goodman and private investigator Glenn Mulcaire were "bang to rights" but would only widen the case to include other NOTW employees if they found "direct evidence" of wrongdoing.
The press standards inquiry heard that police also told Ms Brooks they uncovered evidence of more than £1m in payments by the NOTW publisher, News International , during the phone-hacking investigation.
Tom Crone , the NOTW's head of legal, summarised Scotland Yard's briefing in an email headed "strictly private and confidential" to the paper's then-editor Andy Coulson on September 15, 2006.
Mr Crone began his memo: "Here is what Rebekah told me about info relayed to her by the cops."
It went on: "They suggested that they were not widening the case to include other NOTW people, but would do so if they got direct evidence, say NOTW journos directly accessing the voicemails (this is what did for Clive)."
Mr Crone's message concluded: "They're going to contact RW (Rebekah Wade, Ms Brooks' maiden name) today to see if she wishes to take it further."
Goodman and Mulcaire were arrested on August 8, 2006. They pleaded guilty to intercepting voicemail messages left on royal aides' phones in November that year and were jailed the following January.
After Dep Asst Comm Akers gave evidence The Sun's owner, Rupert Murdoch, released a statement.
He said: "As I've made very clear, we have vowed to do everything we can to get to the bottom of prior wrongdoings in order to set us on the right path for the future.
"The practices Sue Akers described at the Leveson Inquiry are ones of the past, and no longer exist at The Sun."
Later in the day former Labour deputy prime minister John Prescott gave evidence to the inquiry.
Lord Prescott made clear his dissatisfaction with a police investigation during 2005-6, which found no evidence of his phone or those of his aides being hacked.
He also complained of a seven-week delay in receiving a response by Assistant Commissioner John Yates , who conducted a review of the original investigation, in 2009.
Lord Prescott subsequently wrote to the director of legal services at the Met Police, asking for formal notification of any information it held concerning him in relation to Goodman or Mulcaire.
Lord Justice Leveson said the letter to the Met legal department was "pretty clear" and "you put everything in".
Lord Prescott replied: "Yes, it was because I thought a legal (officer) would not lie but the police probably would."
He also questioned what he saw as a "conspiracy of silence" between police investigators and officials at the Crown Prosecution Service (CPS) , which is responsible for pursuing criminal cases in court.
Lord Leveson said: "I'm sure you've heard the phrase, 'cockup and conspiracy' before." He added that he was not drawing a conclusion to Lord Prescott's claim.
Lord Prescott replied: "You sound more charitable than me. I don't go with cockup.
"These are highly paid, highly intelligent people. I think there is more a conspiracy of silence to hide the facts.
"And frankly, I am stronger of that view in the last few months."