Sienna Miller has accepted £100,000 compensation from the News of the World after it accepted unconditional liability for her phone-hacking claims.

The unexpected agreement came midway through a high court battle with the paper. The actor is the first celebrity to settle a claim since the tabloid, part of Rupert Murdoch's News Group Newspapers (NGN), last month admitted hacking the phones of several public figures. The settlement is the highest privacy award to date; NGN will also pay Miller's legal costs.

Michael Silverleaf QC, NGN's barrister, had previously claimed Miller's case could result in £400,000 in damages. He told the court this would be a "ludicrous" sum.
Separately, it emerged that James Hewitt, the man who became famous for his affair with Princess Diana, is poised to sue for invasion of privacy. He will issue proceedings next week after the Metropolitan police showed him evidence that suggested he may have been targeted by Glenn Mulcaire, the private investigator who was jailed for phone hacking in 2007.

Hewitt's lawyer, Charlotte Harris of Mishcon de Reya, confirmed that her client is to begin action against the paper: "He's had his meeting with the police, we're satisfied he has a strong case and we will be issuing legal proceedings next week."

Max Clifford has claimed Koo Stark, a former girlfriend of Prince Andrew, is also poised to sue a tabloid over phone-hacking, although it is unclear which title he was referring to. Her lawyer, Andrew Veen, said he could not comment at this stage.

Clifford said that his understanding was that the title was not part of the News International stable, which includes the Sun, The Times and Sunday Times. "She approached me some time ago saying she is convinved her phone was tapped when she was with Prince Andrew," he said. "She wanted her to put me in touch with lawyers and she has been taking legal advice. I won't say who she thinks it was, but it wasn't News International".

Miller's legal team had previously insisted she was not concerned with the financial aspect of the settlement. "The crucial point in our view is to know the extent of the wrongdoing," Hugh Tomlinson QC, Miller's barrister said in court.

He added that she had made the last-minute agreement "precisely because all her claims have been admitted [comprising] misuse of private information, breach of confidence, publication of articles derived from voicemail hacking and a course of conduct of harassment over a period of 12 months as resulting from all that.

"Her primary concern is not how much money is rewarded by way of compensation but what the extent was of the hacking that took place," he said. "What she wants is to have is disclosure and proper answers from the News of the World as to what took place so she can have effective non-monetary relief and can be properly compensated."

Silverleaf told the high court the story about her troubled relationship with actor Jude Law, which was published after her voicemail was hacked, was "hurtful" to the 29-year-old. He said £100,000 was fair because it was more than what she would receive if she had suffered a "life-changing experience" such as the loss of an eye or facial scarring.

"What she wants is a public inquiry that goes beyond what the remedy in civil law provides," Silverleaf added. "The complainant's career, reputation or life has not been affected in the long term. She said she was upset at the time. She does not suggest she suffered any long-term harm, there is no suggestion in the pleading."

Last night Hugh Grant backed the use of injunctions to protect celebrities' private lives. Speaking on Newsnight, he said the British press had "been completely out of control for the last 20 years". He added: "It's a bit like living under the Stasi. You never know when you haven't got a long lens in the bushes at the end of my road or in a car … I've had my phone hacked, I've had the police come and tell me that now. They're always looking for anyone you may have been in contact with." Grant said that it would be "wonderful" if newspapers closed as a result of injunctions . "It's fabulous that people can go to a judge and stop these things being printed, and it's wonderful that ultimately if it goes on like that the worst of the tabloids will pretty much go out of business, because there's very little real journalism done in those papers now.

"It's mainly stealing successful people's privacy and selling it," he said. At least 24 breach of privacy claims have been lodged against the News of the World by celebrities who believe their mobile phone voicemails were eavesdropped on using stolen information, such as pin codes, obtained by Mulcaire. The newspaper has admitted hacking at least eight public figures' voicemails.

Rupert Murdoch's News International announced last month it was setting up a £20m compensation fund.

A News International spokeswoman said: "We're pleased we have managed to bring this case to a satisfactory conclusion. Several weeks ago we admitted liability in certain cases and offered a genuine and unreserved apology. We hope to resolve other cases swiftly.

"For the record, reports that we have been ordered to disclose 8,000 emails to Ms Miller are inaccurate. The error stems from a reference in court to the fact that a total of 8,000 emails were being searched to ascertain whether any Sienna Miller related material was amongst them."

A statement from both Miller and NGN will be read to the court at a hearing next Friday.
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