By Sam Tobin

LONDON (Reuters) -Queen Elizabeth knew that Rupert Murdoch’s UK newspaper arm had been spying on her family and their friends, and authorised her staff to “draw a line” under the issue, according to an email released on Thursday in a lawsuit by her grandson Prince Harry.

Harry is suing Murdoch’s News Group Newspapers for hacking into mobile phones and other unlawful acts he says were committed against him on behalf of its tabloids, the Sun and the now-defunct News of the World, from the mid-1990s until 2016.

News Group, which has settled more than 1,000 phone-hacking cases over the past decade, is trying this week to strike out Harry’s claim and a similar case brought by British actor Hugh Grant, arguing they should have taken action sooner.

Clive Goodman, the News of the World’s then royal reporter, was jailed in 2007 for illegally intercepting royal household phone messages.

Harry, estranged from his father King Charles, says he did not bring a lawsuit earlier because of a “secret agreement” between Buckingham Palace and Murdoch’s executives to protect the royal family from embarrassment. News Group denies any such agreement, while the palace has not commented.

A 2017 email from the palace, submitted to the court by Harry’s legal team and released on Thursday, appears to show that royal staff tried to put the phone hacking claims to rest, with the backing of the then-queen, who died last year.

It was time to “draw a line” under the dispute, the director of royal communications, Sally Osman, wrote to News Corp Chief Executive Robert Thomson.

“The fact that we can have this conversation, with the queen’s full authority and knowledge of the scale and effect of hacking and surveillance on her family, their staff, associates, friends and family, is important with a view to resolution in the near future,” Osman wrote.

In another email in early 2018, Osman told Thomson and Rebekah Brooks, head of Murdoch’s UK subsidiary, of “an increasing sense of frustration here at the lack of response or willingness to engage in finding a resolution”.

Osman told Brooks in a separate 2018 email that there was an “institutional appetite” within the royal family to resolve Harry’s phone-hacking case.

“We are still very much of the mind that we don’t want this to become embroiled in legal negotiation but it would clearly assist if our lawyers now spoke to yours,” Osman wrote.

Harry ultimately filed his lawsuit in 2019.

Harry has said NGN settled a phone hacking claim from his brother William “for a huge sum of money in 2020… without any of the public being told, and seemingly with some favourable deal in return for him going ‘quietly’ so to speak”.

Buckingham Palace has not commented and William’s office said it could not comment on ongoing legal proceedings. News Group has disputed the existence of a “secret agreement” but declined to comment on whether it settled with William.

The case is one of four Harry is currently pursuing against British publishers, following claims in his Netflix documentary and memoir “Spare” accusing tabloids of widespread unlawful activity and his family of colluding with them.

The preliminary hearing is expected to conclude on Thursday, with a trial due in January if the judge lets it go ahead. Harry, who now lives in California with his family, was not in court, but is following the proceedings by video link. Grant attended court in person on Thursday.

(Reporting by Sam TobinEditing by Peter Graff and Frances Kerry)

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