Dan Evans, a former reporter and self-confessed phone hacker on the tabloid, said Andy Coulson was one of 10 senior figures on the now-defunct paper who knew how he intercepted voicemails to generate front page stories.
Mr Coulson, editor of the mass-selling tabloid until 2007 who then worked in Downing Street until 2011, has denied any knowledge of phone-hacking and says he could not be expected to know the source of every story in his paper.
Evans, 38, took to the stand at London's Old Bailey court for a second day on Tuesday to detail his methods, after he admitted conspiring to intercept voicemails.
He said that on one occasion in October 2005 he had played a hacked recording of a voicemail to his then editor Mr Coulson and other senior figures on the paper that had been left by the actress Sienna Miller for James Bond actor Daniel Craig.
"Andy came over wanting to hear the tape. I played the tape a couple of times and they listened to it," Mr Evans told the court. "Andy became very animated and said 'brilliant'."Another journalist who was present took the reporter by the arm and said: "You are a company man now." Evans joined the Sunday tabloid in 2003, after being approached by News of the World staff who, he said, wanted to exploit his phone hacking in the fiercely competitive tabloid market.
The voicemail revealed that Miller, then girlfriend of another British actor, Jude Law, who gave evidence on Monday, was having an affair with Craig.
Evans told the jury that, having heard the recording, Mr Coulson came up with an elaborate plan to mask how the reporters had come across the tape. That included having a copy of the recording made, placed into a bag and dropped at the gates of the News Corp site in Wapping, to be picked up by security. That would enable the reporters to pretend it had been dropped off by an anonymous source when it later arrived back in the newsroom.
Evans is the fourth journalist from the News of the World to have admitted phone-hacking charges. Mr Coulson has pled not guilty to conspiring to intercept voicemails and authorising illegal payments to public officials.
Six others are also on trial and deny all charges. The trial continues.