Former Rupert Murdoch confidante Rebekah Brooks was cleared of all charges while British Prime Minister David Cameron's one-time media chief Andy Coulson was convicted of phone hacking in a dramatic end to the News of the World trial.
The jury delivered their verdicts after eight days of deliberations and nearly eight months of evidence sparked by the scandal that led to News Corp boss Murdoch shutting down the Sunday tabloid in disgrace in July 2011.
Cameron swiftly gave a "full and frank apology" for hiring Coulson as his communications director despite knowing that the former News of the World editor had resigned from the paper when the hacking saga first emerged.
At the close of what had been dubbed the "trial of the century", an emotional Brooks, 46, had to be supported by a court nurse after being acquitted of conspiring to intercept voicemails and of plotting to bribe officials for stories.
But while the flame-haired Brooks walked free from the Old Bailey court in London, Coulson, her former lover, faces jail following his conviction.
The pair had an on-off extra-marital affair for several years while working at the paper, a further taste of scandal that only emerged at the start of the trial.
The case centred on News of the World's efforts to hack the phones of Britain's royal family, politicians, celebrities and victims of crime, including a murdered schoolgirl and families of people killed in the July 7, 2005 London bombings.
Brooks's current husband Charlie, a racehorse trainer, and News International director of security Mark Hanna were also cleared of perverting the course of justice by allegedly trying to hide evidence from the police.
Her former personal assistant Cheryl Carter was cleared of conspiracy to pervert the course of justice. The paper's retired managing editor Stuart Kuttner was also cleared of conspiracy to hack phones.
The scandal raised questions about the judgement of Cameron in hiring Coulson, 46, who resigned as editor of the News of the World in 2007 after a journalist and private investigator were convicted of phone hacking.
- Cameron's 'bad decision' -
Cameron made a televised statement apologising after the verdict, in line with a promise he made in parliament when the scandal first broke three years ago.
He said he had given Coulson a "second chance" in appointing him to his team.
"It was a second chance, it turns out to be a bad decision and I'm extremely sorry about that," Cameron said.
"Employing someone when they gave false assurances was the wrong decision. I'm profoundly sorry about that."
Cameron was also a close friend of Rebekah Brooks, admitting that he had once been horse riding with her, while Murdoch's papers swung behind Cameron's Conservatives before Britain's last general election in 2010.
Brooks quit as head of News International, the former British newspaper wing of Murdoch's media empire. She had risen from being a secretary at the company to edit the News of the World and then went on to become one of Murdoch's top aides.
The company now rebranded News UK, said it had "made changes in the way we do business to help ensure wrongdoing like this does not occur again."
There was no immediate reaction from Murdoch.
The jury at the Old Bailey court in London heard highly detailed evidence about the workings of the paper, known for its celebrity scandals and kiss-and-tell stories.
Murdoch shut down the News of the World in a firestorm of disgrace and a boycott by advertisers just over three years ago after it emerged that the paper had hacked the voicemails of murdered schoolgirl Milly Dowler.
The paper was later found to have hacked a long list of public figures including Prince William, the second-in-line to the British throne, his wife Kate Middleton, and celebrities including former Beatle Paul McCartney and actor Jude Law.
The hacking scandal also prompted a judge-led inquiry into the ethics of Britain's famously aggressive press, which made recommendations for reforming the way it is governed. They are yet to be put into force.
The jury on Tuesday was still considering further charges against Coulson, a married father-of-three, and the paper's then royal editor, 56-year-old Clive Goodman, to commit misconduct in a public office by paying officers for two directories of phone numbers linked to the royal family.