As Cameron fielded hostile questions over why he hired Coulson after he resigned from editing the paper in 2007 - despite knowing that one of his journalists had been jailed for hacking into voicemails in search of scoops - Coulson was being questioned by police on suspicion of conspiring in the practice.
Cameron said he took "full responsibility" for his decision to appoint Coulson, who quit Downing Street in January when police relaunched inquiries.
But Cameron rebuffed criticism and strove to spread the blame for an affair that has generated public outrage against the press, politicians and police.
"Murder victims, terrorist victims, families who have lost loved ones in war..." he said.
"That these people could have had their phones hacked into in order to generate stories for a newspaper is simply disgusting."
So widespread was the rot, Cameron told an emergency news conference after Murdoch shut down his best-selling Sunday paper, that only a completely new system of media regulation and a full public inquiry into what went wrong over a decade at News of the World and beyond would meet public demand.
"This scandal is not just about some journalists on one newspaper," Cameron said. "It's not even just about the press. It's also about the police. And, yes, it's also about how politics works and politicians too."
In a sign of spreading fallout, police investigating allegations of phone hacking raided another tabloid, the Daily Star.