Baku, July 8 (AZERTAC). Former News of the World editor Andy Coulson has been arrested by police investigating phone hacking and corruption allegations.

Ex-NoW royal editor Clive Goodman, jailed in 2007 for phone hacking, has been arrested over corruption claims.

It came as Prime Minister David Cameron defended his decision to employ Mr Coulson and announced two inquiries - one led by a judge - into the scandal.

Mr Coulson has denied any knowledge of phone hacking while he was NoW editor.

Mr Coulson, 43, was arrested at 1030 BST on Friday by detectives investigating allegations of hacking the phones of various people in the news and is also being questioned about corruption allegations.

He was arrested by appointment at a south London police station and is in custody.

A number of suited men, thought to be police officers, entered Mr Coulson`s south London home with large plastic crates at about 1200 BST.

And, following his arrest, Goodman, 53, is understood to be being held at a south London police station, although not the same one as Mr Coulson.

Mr Cameron said of Mr Coulson: "I became friends with him and I think he did his job for me in a very effective way. He became a friend and he is a friend."

News International has said it is shutting the News of the World after this Sunday`s edition following a spate of fresh revelations.

The 168-year-old tabloid is accused of hacking into phones of crime victims, celebrities and politicians. Police have identified 4,000 possible targets.

Mr Cameron said the judge-led inquiry would look into "why did the first police investigation fail so abysmally; what exactly was going on at the News of the World and what was going on at other newspapers".

"Of course the bulk of this inquiry can only happen when the police investigation has finished. That is what the law requires," he added.

Mr Cameron said a second inquiry would look at the ethics and culture of the press and that the Press Complaints Commission (PCC) should be scrapped, adding: "I believe we need a new system entirely".

He also questioned the tenability of Rebekah Brooks as News International chief executive considering she was editor of the News of the World at the time murdered schoolgirl Milly Dowler`s phone being hacked.

Andy Coulson Mr Cameron said Mr Coulson had become a "friend"

Mr Cameron said there had been reports she had offered her resignation and added: "In this situation I would have taken it."

In January 2007 Goodman, and a private investigator, Glenn Mulcaire, were both jailed for plotting to intercept voicemail messages left for royal aides.

Mr Coulson, who was the paper`s editor at the time, said he took "ultimate responsibility" for the scandal but insisted he was unaware of any phone hacking by his journalists.

He was employed as Mr Cameron`s director of communications in 2007 but Guardian editor Alan Rusbridger claims he warned Mr Cameron`s team not to employ Mr Coulson.

The prime minister said he did not remember receiving "any specific action or information about Andy Coulson" but would check with his officials.

Asked if he had "screwed up" on the decision to employ Mr Coulson, Mr Cameron said: "People will decide."

He said: "I decided to give him a second chance but the second chance didn`t work. The decision to hire him was mine and mine alone."

The prime minister said a company had been hired to run a "basic background check" on Mr Coulson before he was employed while the Conservatives were in Opposition.

Mr Cameron admitted politicians were to blame for "turning a blind eye" to bad practices in journalism.

He said this was a "genuine opportunity" and a "cathartic moment" both for the media and for politicians and he said the phone hacking scandal was a "black cloud" hanging over Fleet Street.

Asked about the decision to close the paper, Mr Cameron said: "What needs to change is not the name of the paper or the letterhead but the practices that go on."