Clive Goodman said in an email to former managing editor Stuart Kuttner in July 2005 that because two of his contacts were in uniform he was taking a serious risk with the cash-only payments he made to them.
"Two are in uniform and we -- them, you, me, the editor -- would all end up in jail if anyone traced their payments, " Goodman said in the email which was read out to the Old Bailey, London's main criminal court yesterday.
"Thanks to the way we pay them, they're untraceable."
Eight defendants, including Goodman and former editors Andy Coulson and Rebekah Brooks, are on trial in the blockbuster case which arose from the scandal that shut the News of the World in July 2011.
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Goodman faces two charges of conspiring with Coulson, his editor at the time, to commit misconduct in public office.
All eight defendants deny the charges.
The email was also forwarded to Kuttner's personal assistant, Beverley Stokes, with whom Goodman discussed the arrangement of the payments.
Another message referred, by codename, to private investigator Glenn Mulcaire, who was jailed for phone hacking in 2007, and pleaded guilty to a further offence of hacking ahead of this trial.
Stokes told the jury that she found Coulson "a nice enough guy. A bit aloof".
The trial is expected to last until early 2014.