Publishing its Press Standards, Privacy and Libel report today, the commons media select committee said evidence presented to its investigation made it inconceivable that no-one else at the News of the World knew about the phone-hacking other than jailed royal editor Clive Goodman.
News International said last night that it rejected the committee's claims.
Goodman and private investigator Glenn Mulcaire were jailed in 2007 for illegally accessing the voicemails of a member of the royal household.
The News of the World had said Goodman was a rogue reporter acting alone but after the Guardian claimed last year the practice was widespread at the paper, the select committee reopened its investigation
The MPs report concluded that News International - owner of the News of the World - did not carry out a sufficiently rigorous inquiry into phone hacking allegations despite giving the committee assurances that it had during its previous investigation.
In addition, the report concluded that the committee had repeatedly encountered "an unwillingness to provide detailed information, claims of ignorance or lack of recall, and deliberate obfuscation" from the newspaper.
"We strongly condemn this behaviour which reinforces the widely held impression that the press generally regard themselves as unaccountable and that News International in particular has sought to conceal the truth about what really occurred," the report added.
The report went on to criticise the Press Complaints Commission for not investigating the new allegations properly and called for the watchdog to be reformed to improve its public standing.
Although the committee found that its was "inconceivable" that no-one else at the News of the World knew about phone-hacking, it said there was no evidence that then editor Andy Coulson - now Tory director of communications - knew what was going on.
The report said he was right to resign as editor, however, as he had overall responsibility.
The report said that during his summing up Mr Justice Gross, the judge that presided over the Goodman/Mulcaire trail, referred to Mulcaire's hacking phones of other public figures, including model Elle Macpherson, Simon Hughes MP, PFA chief executive Gordon Taylor and publicist Max Clifford - not for the benefit of Goodman but apparently for "others at News International".
In addition, the report said it was unlikely that Ross Hindley (also called Hall), a reporter known to have transcribed phone messages obtained by Mulcaire, did not know the source of the material or was not acting on instruction from superiors.
"Despite this there was no further investigation of who those 'others' [at News International] might be and we are concerned of the readiness of all those involved: News International, the police and the PCC, to leave Mr Goodman as the sole scapegoat without carrying out a full investigation at the time," the report said.
The MPs said they had been "left with a strong impression that silence had been bought" as it emerged that both Goodman and Mulcaire received payments from News International following their convictions - amounts and terms were not disclosed to the committee.
In written evidence, News International said Goodman received a payout, as his dismissal had not been fair, while Mulcaire was paid-off after starting employment tribunal proceedings.
The report said the company's approach in these cases differed markedly from that adopted toward sport reporter Matt Driscoll, who eventually won £800,000 for unfair dismissal after arguing his case at an employment tribunal. "The newspaper strongly resisted that claim," the report said.
The committee of MPs was forced to reopen its inquiry into press standards last summer after the Guardian alleged that News International had paid out-of-court payments to Gordon Taylor and others totalling more than £1m to prevent further revelations about phone-hacking being made public.
The report concludes: "Confidentiality in the Taylor case, the size of the settlement and the sealing of the files, reflected a desire to avoid any further embarrassing publicity to the News of the World."
The MPs said the Guardian article, and subsequent stories, highlighted that a "culture undoubtedly did exist in the newsroom of the News of the World and other newspapers at the time which at best turned a blind eye to illegal activities and at worst actively condoned it".
The report condemned such behaviour and said it had done "substantial damage to the newspaper industry" but added that it had been encouraged that such practises were now regarded as "wholly unacceptable and would not be tolerated".
News International issued a statement accusing members of the select committee of working "in collusion with the Guardian" and following a party-political agenda and making "innuendo, unwarranted inference and exaggeration".
A statement from The Guardian said: "We welcome its findings in relation to the Guardian's investigation of phone hacking at the News of the World, and the clear recognition that our reporting exposed new information and legitimately raised an important point of public interest...
"We are surprised that News International has questioned the integrity of a cross-party committee, with a Conservative MP in the chair, carrying out an independent inquiry as is its historic parliamentary right. Observers will draw their own conclusions about why they have chosen to make this attack."
Oliver Luft writes for Press Gazette