The former royal editor of the now-defunct News of the World (NotW) warned his managing editor that he was aware that if payments to his confidential sources were traced, they would all be jailed, the phone-hacking trial has heard.

In an email to former managing editor Stuart Kuttner, which he forwarded to Kuttner's PA Beverley Stokes, Clive Goodman discussed the contacts that he only paid in cash.

Two were "in uniform" while the third worked at a rival newspaper and was therefore taking a serious risk, the jury at the Old Bailey was told.

The email of July 2005, which was shown to the jury, said: "Morning, Stuart. Understand that, as you know, there are only three people I ever pay in cash.

"Two are in uniform and we - them, you, me, the editor - would all end up in jail if anyone traced their payments.

"Thanks to the way we pay them, they're untraceable."

When reassured by Mrs Stokes that the payments were going to be made, Goodman told the PA: "Fantastic. I won't be found in the Thames wearing concrete wellies tonight."

NotW and Sun editor Rebekah Brooks, 45, of Churchill, Oxfordshire; Andy Coulson, also 45, from Charing in Kent; Ian Edmondson, 44, from Raynes Park, south west London; and Kuttner, 73, from Woodford Green, Essex, all deny conspiring with others to hack phones between October 3 2000 and August 9 2006.

The trial continues.