Andy Coulson listened to tapes of hacked phone messages from a Cabinet minister to his lover, believed they were gross intrusions into their privacy, but decided to publish a story based on them anyway, because he felt it was in the public interest and he did not know that phone hacking was illegal, he told a jury today.

Mr Coulson, former newspaper editor and Downing Street communications director, admitted he heard the hacked messages in August 2004 before the News of the World revealed an affair between the Home Secretary David Blunkett and the publisher Kimberly Fortier.

The Old Bailey has heard police found 330 hacked messages between Mr Blunkett and Mrs Fortier in a safe at Rupert Murdoch's UK newspaper group, and that Mr Coulson had confronted Mr Blunkett about the affair, telling the politician that he was "extremely confident" that it had taken place.

In his third day in the witness box at the phone hacking trial, Mr Coulson said that while on holiday in Italy on 21 July 2004 he had received a phone call from the NoW's chief reporter, Neville Thurlbeck (who has pleaded guilty to phone hacking at an earlier hearing).

He told the court: "Neville told me that he had a tip that David Blunkett was having an affair with Kimberly Fortier. He said that he believed the story was true because he had heard some voicemail messages."

Mr Coulson told the Old Bailey: "I was shocked."

His lawyer, Timothy Langdale QC, asked: "Why?"

The journalist replied: "Because he told me he had heard some voicemail messages and I was shocked he was telling me this as well; because it was in relation to David Blunkett, the Home Secretary."

Asked to explain his response, Mr Coulson cast his mind back a decade and said: "I knew I was quite angry about it and I used some colourful language and words to the effect of: 'What on earth do you think you are doing?'"I was being told that there appeared to be an investigation under way into someone who was a very senior politician, and a friend of the newspaper - and on the face of what Neville was telling me there was a clear breach of privacy."

Mr Coulson explained to the Old Bailey that he told Thurlbeck to halt the investigation immediately."

It wasn't a request. It was very clearly an instruction," Mr Coulson said.

But he recounted that when he returned from holiday, Thurlbeck went into his office and began to "re-pitch" the story."

He said he wanted to argue for the story again and he believed it was in the public interest and he wanted to play some voicemails to demonstrate that."

Mr Langdale asked: "Did he play them to you?"

Mr Coulson replied: "Yes, he did."

He told the court: "My memory is that they were parts of a small number of messages."

Mr Coulson's initial reaction to being played the messages was "pretty testy.""I wasn't pleased," he said.

But he added that he then slowly became sure of the importance for revealing Mr Blunkett's relationship. He said that the messages mentioned Mr Blunkett's visits to the Government spy post GCHQ, and his own security security.

He said: "The more I listened to him [Thurlbeck] the more I felt that there was some public interest justification for what he was telling me."

Asked how he thought the messages had been obtained, Mr Coulson said no "names" or "process" had been mentioned, and he believed Thurlbeck had got themHe decided to confront Mr Blunkett about the affair at a meeting (recorded by the politician, who later passed the tape to the police), during which Mr Coulson did not tell him how he knew he about the relationship, but told him: "I'm extremely confident about the information."

The News of the World splashed its hacking exclusive across its front page on Sunday 15 August 2004: "Blunkett's affair with a married woman."

Looking back on the story, Mr Coulson told the court: "I shouldn't have handled the story the way I did. I should have stuck with my original instinct."

He added: "I felt that at that stage I didn't know it [hacking] was illegal."

Mr Coulson, deputy editor of the News of the World editor between 2000 and 2003 and editor between 2003 and 2007, denies conspiring to intercept voicemail messages. The trial continues.