LONDON (Reuters) - British Prime Minister David Cameron's former spokesman was detained on Wednesday by police on suspicion of perjury after he denied in court any knowledge of phone hacking by reporters at Rupert Murdoch's News of the World.
The detention of Andy Coulson, a former editor of the tabloid, damages Cameron because it calls into question his judgement in seeking to win Murdoch's backing by employing one of his most powerful journalists.
Scottish prosecutors said Coulson was held following his appearance before the High Court in Glasgow in 2010 over a News of the World story published when he was editor.
Perjury can in theory result in a prison sentence of life, although sentences of a couple of years are more typical, a spokesman for the Scottish government justice department said.
While working for Cameron, Coulson told the court that he had no knowledge of illegal activities by reporters while he was in charge. He later stood down as Communications Director for 10 Downing Street and was arrested last July over phone hacking.
"This simply reinforces the questions that are hanging over the prime minister about his judgement in appointing Andy Coulson in the first place," said Ivor Gaber, professor of political journalism at City University in London.
"We now know that lots of people warned Cameron that this might not be an appropriate move," he added.
The detention pushes the scandal over the British elite's cosy ties with the Murdoch media empire to the top of the domestic news agenda, handing valuable ammunition to his political rivals.
Opposition Labour leader Ed Miliband, who cemented control over his party by leading attacks on Cameron's ties to Murdoch, has called the appointment of Coulson an appalling error of judgement.
Police said they had detained a 44-year old man in London but did not name Coulson. He has been taken to Scotland for questioning.
A current spokesman for Cameron declined to comment. Coulson's lawyers declined to comment.
Coulson resigned as editor of the News of the World when his royal correspondent and a private investigator went to jail for hacking into phones in 2007. He denied any knowledge of the practice but said he took ultimate responsibility for the crime.
Months later he went on to work for Cameron, first in opposition and then in government, helping to craft Cameron's media strategy and improve the prime minister's understanding of the electorate.
But as police reopened the probe into phone hacking he was forced to stand down again as it became clear that the practice had been used routinely during his watch.
Coulson has maintained that he knew nothing about the illegal activities at the tabloid, which was shut in July 2011 after it emerged reporters had hacked into a murdered schoolgirl's phone, causing a public outcry.
The appointment returned to the spotlight earlier this month when Coulson told a judicial inquiry into hacking and media standards that he had been given access to some of the government's most sensitive secrets without undergoing full security clearance.
Critics suggested Cameron had been desperate to appoint Coulson to the role, in part to secure the support of Murdoch, and had lifted the normal security checks.
Coulson was called to the Scottish court to answer questions over a front-page story on the News of the World about a Scottish socialist politician, Tommy Sheridan, who the paper accused of visiting a swingers' club.
Reporting by Kate Holton, Tim Castle, Georgina Prodhan; editing by Guy Faulconbridge and Jon Boyle