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Journalists hacked into the phone messages of a missing girl, deleting some to make space for more and thus giving her parents hope she was still alive when she was dead, the parents' lawyer told CNN on Tuesday.
"The family are completely horrified. They thought this was all over" after the disappearance of Milly Dowler in 2002 and the conviction of a man for her murder this year, lawyer Mark Lewis said.
But in April, police told the Dowlers that journalists had hacked into their phones and those of their daughter, he said.
The accusation is the latest twist in a long-running scandal involving media baron Rupert Murdoch's flagship Sunday British tabloid newspaper, the News of the World.
The paper has apologized for hacking into the voicemails of celebrities and politicians, paying compensation to actress Sienna Miller and offering money to others.
But the Dowler case is the first time the newspaper is accused of interfering with a police investigation.
British Prime Minister David Cameron on Tuesday called the allegations "quite shocking" and urged the police to investigate thoroughly.
A former top tabloid journalist Tuesday called the allegations "a step change."
"Before we had hacking of celebrities and politicians, but here we have the interference of a murder inquiry involving a 13-year-old girl," said Roy Greenslade, a former editor of the Daily Mirror and an assistant editor of the Sun, a sister paper of News of The World.
"Outside of the political elite in Britain, this story has had little traction until now. The allegations about the hacking of Milly Dowler's phone has the potential to change that," Greenslade said.
Police Monday declined to say whether Milly Dowler was among the victims of phone hacking.
Executives from Murdoch's News International met with British police Tuesday over the claims, the company told CNN.
One of the top company officials told staff later that it was "almost too horrific to believe that a professional journalist or even a freelance inquiry agent working on behalf of a member of the News of the World staff could behave in this way."
Rebekah Brooks, who was editor of the paper at the time of the alleged hacking and is now chief executive of News International, told staff she was "sickened that these events are alleged to have happened."
She said she had contacted the Dowlers on Tuesday "to assure them News International will vigorously pursue the truth and that they will be the first to be informed of the outcome of our investigation."
Brooks asked Lewis, the Dowler lawyer, to show the company any evidence it had "so we can swiftly take the appropriate action."
She said News International was cooperating with police investigations.
CNN obtained a copy of the e-mail Brooks sent to staff on Tuesday. News International confirmed it was genuine.
Brooks acknowledges in the message that there is speculation she might resign, but said she was "determined to lead the company to ensure we do the right thing and resolve these serious issues."
At least five people have been arrested in connection with phone hacking investigations this year since a new investigation, Operation Weeting, was launched in January.
A journalist and a private investigator working for the News of the World were sent to prison in 2007 for hacking into the voicemails of royal staff in an earlier investigation.
Police launched the new investigation this year in response to widespread complaints from politicians, celebrities and other high-profile figures who fear they have been targets.
News International has apologized for unspecified cases of phone hacking. They say they have been cooperating with police since the new investigation was launched in January.
The Sunday tabloid newspaper in April offered compensation and "apologized unreservedly" for the "unacceptable" hacking. It did not name the victims.
News International owns the News of the World, plus the Sun, the Times and the Sunday Times in Britain.
Murdoch's media empire also encompasses Fox News, the Wall Street Journal, the New York Post and Harper Collins publishers.
Source: AP