Princess Diana was "looking for an ally" to take on Prince Charles when she allegedly leaked royal directories to the News of the World's Clive Goodman in 1992, the Old Bailey has heard.
Goodman said Diana, who separated from her husband in 1992 after 11 years of marriage, passed him information relating to the royal household and staff in an envelope sent to his office in Wapping.
The Princess of Wales wanted "to show there were forces that would rage against him", he said while giving evidence at the trial into phone hacking.
"She felt she was being swamped by people close to his household," Mr Goodman added.
Diana and Charles eventually divorced in 1996. She was killed in a car crash in Paris a year later.
Princess Diana leaked a confidential book of royal directories to Clive Goodman to show the "scale of her husband's household", the trial into phone hacking heard today.
The then Princess of Wales had a "very close relationship" with a number of journalists, Mr Goodman told the Old Bailey.
He added that Diana told him she wanted me to him to see the leaked directory because she "wanted me to see the scale of her husband's household compared to hers".
Princess Diana leaked royal directories to former News of the World reporter Clive Goodman, he told the phone hacking trial at the Old Bailey today.
The culture at the News of the World was "extraordinarily competitive" and there was an atmosphere of "bullying", the newspaper's former royal editor has told the Old Bailey.
Clive Goodman is accused of two counts of conspiracy to commit misconduct in a public office, alongside the newspaper's former editor Andy Coulson. Both deny the charges.
Describing the atmosphere at the paper, he said there was "an extreme drive for results" and that staff were "hauled over the coals by management" if they did not deliver.
In 2007, Mr Goodman was jailed for four months after pleading guilty to illegally intercepting phone messages from Clarence House.
He was subsequently dismissed from his job at the News of the World.
Rebekah Brooks texted former prime minister Tony Blair that she was "feeling properly terrified" the day before a police interview, the Old Bailey heard.
The former News International chief engaged in a series of texts with Mr Blair in the days leading up to her arrest on July 17 2011.
At 7.34am on July 16, Brooks told the former prime minister she had an interview with police the next day.
She texted: "Feeling properly terrified! The police are behaving so badly."
Mr Blair replied: "Everyone panics in these situations" and later: "I'm no use on police stuff but call me after that because I may be some help on Commons."
Nobody at the News of the World told the editor they thought Milly Dowler was alive and working in a factory in the Midlands while she was on holiday, Rebekah Brooks told the hacking trial.
Pressed by the judge Mr Justice Saunders if she would expect to be told if they had found Milly while she was on holiday, Brooks replied:
"I think if it had been believed back at Wapping that they were sure beyond all reasonable doubt that they had found Milly Dowler working in a factory in... Telford, wherever... that they would have told me, I'm sure. The fact is nobody told me."
On her 12th day in the witness box at the Old Bailey, she was questioned by prosecutor Andrew Edis QC about her contact with co-defendant Coulson when she was away.
Rebekah Brooks has denied being told while on holiday that News of the World staff thought Milly Dowler was alive and working in a factory.
No-one at the newspaper told her that they believed that the 13-year-old was employed in Telford, the former editor told the Old Bailey.
The court had already heard that the false lead was garnered from the hacking of the missing schoolgirl's voicemails by private investigator Glenn Mulcaire, who was working on behalf of journalists at the paper.
Brooks, who was on holiday at the time of the perceived discovery, said an operation to find the teenager by members of the paper's staff had not been disclosed to her.
Rebekah Brooks says police officers were not paid for confidential information during her six-year stint as editor of the Sun.
"I have never knowingly sanctioned the payment of a police officer for information in the line of his duties," she told the Old Bailey.
"You would not pay a public official unless it was in the public interest," she added. "To pay a serving public officer, it would have to be an incredibly high bar."
Ms Brooks said that she was in a "constant dialogue" with her reporters over how they dealt with public officials.
Rebekah Brooks was asked to approve cash payments to public officials for stories such as a wife-swapping mayor and Prince William wearing a bikini at a party, the phone-hacking trial has heard.
She was confronted in the witness box at the Old Bailey about a string of emails addressed to her from journalists while she was editor at the Sun, many asking her to OK payments.
One concerning a story about a wife-swapping mayor from Tetbury in Gloucestershire specifically sought Brooks' approval to give money to a serving police officer who had provided "numerous tips in the past", the court was told.
The jury heard that others did not give the source but may have involved officials such as serving police or Army personnel.
Mrs Brooks told the trial she would only have sanctioned payment to a serving public official for a story relating to his work if there was a very strong public interest.
She denies all the charges against her, including conspiring to commit misconduct in public office.