Political blogger Paul Staines, who writes a political blog under the name Guido Fawkes. Photograph: Sarah Lee for the Guardian

Sources who worked at the News of the World have confirmed an allegation, made at the Leveson inquiry by maverick blogger Paul Staines, that the paper paid him £20,000 to buy up a photograph of a special adviser to the foreign secretary, William Hague, which they subsequently never published.

Staines's claim is potentially explosive because the now-disgraced former News of the World editor, Andy Coulson, was acting at the time as the Cameron government's press adviser, and is likely to have been involved in what proved to be a successful battle to save Hague's job.

The photograph was bought at the height of a controversy about Hague sharing a hotel room during campaigns with a 25-year-old special adviser. Hague was forced to issue a detailed statement denying he had had a gay relationship, and the recently appointed adviser, Chris Myers, resigned.

Staines, who runs a gossip site under the name Guido Fawkes, told Lord Justice Leveson in sworn testimony: "We also had pictures of the special adviser in a gay bar … We took the photos to the News of the World. They bought them for £20,000 and never published them. I don't know very much but I know you don't pay £20,000 for photos not to publish."

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