Prince Harry's legal battle has unexpectedly exposed his brother, Prince William, as having received a significant payout in connection with Rupert Murdoch's News Group Newspapers (NGN) phone hacking scandal.

The revelation came to light on Tuesday, April 25, as Harry pursues a lawsuit against the publishers for unlawfully accessing his family's private information through phone calls and voicemails over several years.

NGN has sought to have the case dismissed, arguing that the Duke of Sussex raised his concerns too late.

However, Harry countered that he was previously unable to file the lawsuit due to a confidential financial agreement between NGN and the royals, which prevented the royal family from taking action against the publishers.

Harry asserted that Queen Elizabeth II agreed to the arrangement so that no members of the monarchy would have to testify or have their private affairs exposed.

"The institution was incredibly nervous about this and wanted to avoid at all costs the sort of reputational damage that it had suffered in 1993 when The Sun and another tabloid had unlawfully obtained and published details of an intimate telephone conversation that took place between my father and stepmother in 1989, while he was still married to my mother," Harry stated in the documents.

Harry claimed that in 2017, he and William were granted permission by the late monarch to confront the issue with Murdoch directly. However, King Charles allegedly obstructed the effort, as he sought to "keep the media, including NGN, onside in order to smooth the way" for his ascension to the throne.

Ultimately, William received a "very large sum" to drop the matter, though NGN denied any secret agreement ever occurred.

"It is important to bear in mind that in responding to this bid by NGN to prevent his claims going to trial, [Harry] has had to make public the details of this secret agreement, as well as the fact that his brother, His Royal Highness Prince William, has recently settled his claim against NGN behind the scenes," Harry's lawyer elaborated. "This is used very much by [Harry] as 'a shield, not a sword' against NGN's attack."

A decision on whether Harry's lawsuit will proceed to trial is expected later this week.

The Washington Post and CBC have reported on the lawsuit documents and William's undisclosed settlement.