News Corp may face a big problem with Glenn Mulcaire, the private investigator convicted in 2007 of hacking voicemail messages for News Of The World. Up to now he has largely kept quiet about what went on there — even appealing a court order that required him to name NOTW journalists involved in voicemail spying. But he seems to be sending a message that his days as a good soldier may be over following James Murdoch’s decision last month to stop paying Mulcaire’s legal bills. Murdoch appeared embarrassed when asked about the arrangement last month during his testimony before the parliamentary committee investigating the hacking scandal. Murdoch said that he was “as surprised as you are” to learn that his company was helping Mulcaire. Shortly afterward the PI fired a shot across Murdoch’s bow by issuing a statement saying that had been “effectively employed” by NOTW and “acted on the instructions of others.” Now Mulcaire says Murdoch’s decision is a breach of contract. In a case filed this week at U.K. High Court, Mulcaire says that in June 2010 News Corp promised to indemnify him against the legal costs and damages from his appeal. News International  says it will “vigorously” challenge Mulcaire.

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