In a statement, police said one of the men was 48-year-old Clive Goodman, the royal correspondent for the country's biggest selling newspaper The News of the World.

They charged him and a 35-year-old named as Glen Mulcaire with illegally accessing voicemail messages on eight occasions between January 3 and May 30 this year, and with conspiracy to intercept communications.

"They have been released on police bail to appear (before magistrates) on Wednesday, August 16," the statement said.

Police launched their investigation after members of staff working for heir to the British throne Prince Charles said they thought someone was listening to their phones.

One police source told Reuters on Wednesday that officers were now working with phone companies to check whether other rich and powerful people had been snooped on.

"We don't know the full scale of it yet," the source said, asking not to be named. "We're looking at numbers: what other public figures might have been subject to the interception."

Goodman and Mulcaire were charged under the Regulation of Investigatory Powers Act 2000, which makes it a crime to intercept communication on public telecoms systems - including e-mail and voicemail - without proper authority.

Police say the men tapped into mobile phone voicemail messages.

The case has intrigued a public used to the tactics of hungry tabloids desperate for scoops. It recalls the "Squidgygate" and "Camillagate" scandals of the early 1990s, when newspapers obtained phone conversations of Prince Charles and of his late wife Diana.

Back then, Diana was taped talking to her lover James Gilbey, who called her "Squidgy". Charles was recorded memorably telling his then mistress - now wife - Camilla Parker Bowles that he wanted to be reincarnated as her tampon.

Tabloids have since sent undercover reporters to get jobs as palace servants. A Daily Mirror reporter hired as a palace footman in 2003 revealed, among other things, that Queen Elizabeth ate breakfast cereal served in a plastic bowl.

Other newspaper reporters have since been arrested trying to repeat the stunt.

Veterans of Fleet Street - the collective name given to British newspapers which used to be located on that "street of shame" in central London - say there is nothing unexpected about journalists being accused of eavesdropping.

"It's been around I would say for the best part of the last 80 years," said James Whitaker, veteran royal correspondent of the Daily Mirror, who said he has received tip-offs from sources that had access to intercepted radio communications.

"Phone tapping. Bugging. Whatever you call it. It's not just the royals. Ministers, famous people," he said. "But if you get caught, you get into trouble."