James Hipwell said he witnessed daily hacking by Mirror showbusiness reporters working a few feet from his own desk in 1999.
Hipwell said he believed the practice was sanctioned by senior editors, although he had not seen it taking place in the presence of Morgan, who edited the newspaper from 1995 until 2004, or discussed in front of him.
“It seemed to me that what they were doing was entirely accepted by the senior editors on the newspaper,” he told the Leveson Inquiry into press standards. “I think it was seen as a slightly underhand thing to do but not illegal.”
Hipwell was fired from the Mirror in 2000 and later jailed for illegal share dealing linked to his financial column.
Morgan, now a CNN talk-show host in the US, edited the Rupert Murdoch tabloid at the heart of the phone-hacking scandal, the News of the World, from 1994 to 1995 before going on to edit the Daily Mirror.