Rupert Murdoch’s son James has been accused of misleading British MPs while answering questions at a Parliamentary hearing into phone hacking.

Murdoch Junior told MPs he did not know when authorising a settlement that phone hacking at News of the World went beyond one reporter.

Colin Myler, the newspaper’s former editor and Tom Crone, who resigned last week as legal manager for the Murdoch media empire’s British publishing arm News International, issued a statement saying they had warned him there was evidence when he authorised a key payout to a victim.

James Murdoch, the chairman of News International, told a parliamentary committee he did not know of the evidence when he approved a payout to Gordon Taylor, chief executive of the Professional Footballers’ Association.

Myler and Crone said: “We would like to point out that James Murdoch’s recollection of what he was told when agreeing to settle the Gordon Taylor litigation was mistaken.”

The storm centres around the “transcript for Neville” email, which was allegedly sent by a junior reporter to private investigator Glenn Mulcaire and contained transcripts of messages hacked by the snooper.

The Neville referred to is believed to be the defunct paper’s chief reporter Neville Thurlbeck, and suggests he may have known about the practice, contradicting News International claims it was limited to a lone reporter.

When asked by Labour lawmaker Tom Watson in Tuesday’s hearing whether he knew of the existence of the email when settling out of court with Taylor, Murdoch answered: “No, I was not aware of that at the time.”

Myler and Crone disagreed, saying: “We did inform him of the ‘for Neville’ email which had been produced to us by Gordon Taylor’s lawyers.”

James Murdoch said in a statement: “I stand by my testimony to the Select Committee.”

Tuesday’s committee quizzed Murdoch over the unusually high settlement fee, suggesting it was intended to ensure the matter remained out of public view.