By Martin HickmanDAY 28 - Rebekah Brooks and Piers Morgan bantered about hacking into each other's phones at the 35th birthday party of their fellow tabloid editor Andy Coulson, the Old Bailey was told yesterday.Former lawyer Ambi Sitham told the phone hacking trial that she had gone to a steak restaurant in Balham, south London, for the party as the girlfriend of publicist Neil Reading, who knew all three editors.Giving evidence by video link from Los Angeles, Ms Sitham said that during a lull in conversation she found herself not talking to anyone and began over-hearing a discussion between Mrs Brooks, (then Wade) sat to her left, and Mr Morgan sat opposite her.At the time of the meal, Mr Morgan was editing the Daily Mirror and Mrs Brooks was editing The Sun. At 7.30pm, Ms Sitham said, they still were in phone contact with their offices finalising their respective front pages for the next day.Ms Sitham told the jury: "Basically, he [Morgan] said to Rebekah that he already knew what her splash was going to be. He said something along the lines of: 'I already know what your splash or cover is because I've been listening to your messages'.""She came back to him and retorted: "Been hacking into my phone again, Piers?" Asked by prosecutor Andrew Edis QC, how Mr Morgan responded, Ms Sitham said: "He said something along the lines of: "Well, you've been looking at my emails." The "pointed" conversation was "quite a quick back and forth," she added.At the end of the meal, Ms Sitham, then working for media law firm Schillings, agreed to stay in touch with Mrs Brooks so that they settle legal cases more amicably directly.She told the court: "I went to give out my number, and Piers said: "Careful, she'll tap your phone!"Cross-examined by Mrs Brooks's counsel, Clare Sibson, Ms Sitham said she had "foolishly" not told her employers about the conversation, adding that she had only later understood its significance.Mrs Sibson asked her: "The truth is that this conversation didn't happen, did it." Miss Sitham replied: "It did."Mrs Sibson quoted from a blog by Miss Sitham where she recounted being "huddled" in a cafe with Hacked Off's Associate Director Evan Harris, Hacked Off board member Hugh Grant and journalist Nick Davies. They had encouraged her to give a statement to the Leveson Inquiry into newspaper ethics, she said.Mrs Sibson also pointed out they had also discussed she might be able to take part in a documentary by The Guardian or the New York Times to explain why she had given evidence.Mrs Sibson asked her: "Is this exercise about giving evidence not something about wanting to publicise yourself?" Ms Sitham replied: "I don't believe that going through this entire process has given me anything but a stomach ulcer, lost friendships and sleepless nights... But I still maintain I'm doing the right thing."Later, she said that her once close friendship with Mr Reading had ended and they were no longer in touch with each other.Mrs Brooks and Mr Coulson deny plotting to hack phones. Mr Morgan is not on trial.