News International acted "quickly and decisively" in dealing with "abhorrent" phone-hacking at the News of the World, the company's former chief executive Rebekah Brooks has told MPs.
She said the firm only realised the extent of allegations during actress Sienna Miller's civil case last year.
Mrs Brooks said she was "shocked" at reports her journalists had hacked murder victim Milly Dowler's phone.
The ex-NoW editor added she had never sanctioned payments to police.
Mrs Brooks told the Commons Committee on Culture, Media and Sport she had repeatedly been told reports of hacking at the newspaper were untrue.
"We had been told by people at News of the World at the time - they consistently denied any of these allegations in various internal investigations," she said.
"It was only when we saw the Sienna Miller documentation that we realised the severity of the situation."
'Horrific and abhorrent'
She added: "I think we acted quickly and decisively then, when we had that information."
Mrs Brooks's evidence came after her former boss, Rupert Murdoch, chairman of News International's parent company News Corporation, and his son, NI's chairman James, appeared before the committee.
The public were excluded from Mrs Brooks's hearing after an attempted assault on Rupert Murdoch and there were rows of empty seats behind her as she spoke.
At the start of the hearing Mrs Brooks told the MPs she wanted to offer her "personal apologies".
She said: "Allegations of voice intercepts, internet intercepts of victims of crime is pretty horrific and abhorrent and I wanted to reiterate that."
Mrs Brooks is on bail after her arrest on Sunday by detectives probing allegations of conspiring to intercept communications and corruption but she denies any wrongdoing.
Her lawyer sat alongside her at the hearing so as not to "impede those criminal proceedings" but Mrs Brooks said she hoped to be as "open as possible".
She said she had "never knowingly sanctioned a payment to a police officer" in her career and said in her experience, information police gave to newspapers came "free of charge".
A statement given to MPs at a committee hearing in 2003 referred to a "widely held belief" that such payments were made - as opposed to her knowing them to be a "widespread practice", she added.
She said: "You've had various crime editors from Fleet Street discussing in the past payments have been made to police officers. I was referring to that."
She said she was "aware that the News of the World used private detectives, as every paper in Fleet Street did".
But she denied she had met Glenn Mulcaire, who was convicted of phone-hacking in 2007, saying she had first heard his name in 2006 and said she believed he first worked for the paper in the late 1990s before her tenure.
Mrs Brooks, who resigned from her News International post on 15 July, added that her own phone messages were being accessed by Mulcaire.
She also denied knowing another private investigator who worked for the newspaper, Jonathan Rees - but admitted it did "seem extraordinary" that he was rehired by the newspaper after serving a prison sentence.
She said her own use of private investigators while she was at the News of the World was "purely legitimate" and was largely to do with her "Sarah's Law" campaign for more information on convicted paedophiles to be made public.
Mrs Brooks also said many claims about her relationship with David Cameron were untrue: "I have never been horse riding with the prime minister, I don't know where that story came from," she said.
"The truth is that he is a neighbour and a friend but I deem the relationship to be wholly appropriate and at no time have I ever had any conversation with the prime minister that you in the room would disapprove of."
She also denied she had advised Mr Cameron to employ Andy Coulson after he quit as News of the World editor - saying it was well known that it was Chancellor George Osborne's idea.
The News of the World closed this month shortly after reports emerged claiming that the voicemails of Milly Dowler had been hacked when the schoolgirl went missing in 2002 while Mrs Brooks was editor of the paper.
Mrs Brooks told the committee: "The idea that Milly Dowler's phone was accessed by someone being paid by the News of the World, or even worse authorised by someone at the News of the World, is as abhorrent to me as it is to everyone in this room."
She said she found it "staggering to believe" that anyone at the News of the World could have authorised it and said it was not a practice that was sanctioned at the newspaper under her editorship.
She added: "I don't know anyone in their right mind who would authorise, no, sanction, approval, anyone listening to the voicemails of Milly Dowler in those circumstances. I just don't know anyone who would think it was the right and proper thing to do at this time or at any time."