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Former News of the World editor Andy Coulson has been released from police custody after being arrested over allegations of phone hacking and payments to officers.

The ex-Tory spin doctor left Lewisham police station in south east London amid a media scrum, saying: "There is an awful lot I would like to say, but I can't at this time."

He was released on police bail until October.

Former News of the World royal editor Clive Goodman was also arrested on Friday.

As Mr Coulson left the police station he was surrounded by photographers and police officers who escorted him to a silver Volvo and then he was whisked away.

Mr Goodman was released on police bail minutes after Mr Coulson, again until October.

A Scotland Yard spokesman said: "Two men arrested by officers from Operation Weeting together with officers from Operation Elveden this morning have been bailed.

"A 43-year-old man arrested on suspicion of conspiring to intercept communications and corruption allegations has been bailed to return to a London police station in October.

"A 53-year-old man arrested in connection with corruption allegations has been bailed to return to a London police station in October."

The Prime Minister came under fire for an "appalling error of judgment" in his appointment of Mr Coulson as Director of Communications.

David Cameron was forced to defend his decision to repeatedly back Mr Coulson even though he had resigned from his newspaper over the phone hacking scandal and continued to be dogged by further allegations.

The former editor resigned from his Downing Street post in January, saying the drip-drip of claims about illegal eavesdropping under his editorship was making his job impossible.

The Prime Minister explained his reasons for giving Mr Coulson a "second chance" in a hastily convened press conference at No 10.

He said he took "full responsibility" for the appointment but insisted he had commissioned a firm to carry out a background check beforehand.

Mr Coulson, of Forest Hill, south London, was arrested at Lewisham police station at 10.30am on suspicion of conspiring to intercept communications and alleged corruption, and released shortly before 7.30pm.

Mr Goodman was held over corruption allegations in a dawn swoop on his Surrey home.

He and private investigator Glenn Mulcaire were jailed in January 2007 for hacking into royal voicemail messages, including some left by Prince William, now the Duke of Cambridge, while working for the News of the World.

The homes of Mr Coulson and Mr Goodman were searched by detectives.

Meanwhile chief executive of News International Rebekah Brooks, who has faced calls to resign, addressed News of the World staff and pledged to find as many of them as possible jobs within the company.

Mr Cameron also outlined sweeping changes to the way newspapers are regulated in the wake of the News of the World being sacrificed by News International chairman James Murdoch, son of media mogul Rupert Murdoch.

The decision was announced after advertisers deserted in droves over claims that murdered schoolgirl Milly Dowler, bereaved military families and relatives of 7/7 bombing victims were targeted by hackers working for the tabloid.

Amid widespread public anger, police chiefs revealed that 4,000 people might have fallen victim and that evidence indicated journalists had paid officers.

Labour leader Ed Miliband claimed Mr Cameron's aides were handed a wealth of information warning them about practices Mr Coulson was involved in while editor of the News of the World.

He said: "Putting it right for the Prime Minister means starting by admitting the appalling error of judgment he made in hiring Andy Coulson, apologising for bringing him into the centre of the Government machine, coming clean about what conversations he had with Andy Coulson, before and after his appointment, about phone hacking."

Former NotW and current Sky journalist Sophy Ridge said Ms Brooks had told reporters on the newspaper: "In a year you will understand why this decision was taken."

She also said Ms Brooks had pledged to take a "quick decision" on whether The Sun will be published seven days a week, and had not ruled it out.

The Financial Times has reported that News Corporation chairman Rupert Murdoch plans to fly into London on Saturday to confront the crisis.l