As media mogul Rupert Murdoch wrapped up a turbulent visit to Britain, Cameron made a statement during a stormy emergency session of parliament defending his original decision to employ ex-News of the World editor Andy Coulson.
But a day after cutting short a trip to Africa to confront the crisis, the under-pressure Conservative leader conceded he would not have employed Coulson had he been able to predict the furore of recent weeks.
"With 20-20 hindsight and all that has followed, I would not have offered him the job and I expect that he wouldn't have taken it," Cameron said amid jeers from opposition lawmakers.
"You live and you learn and believe you me, I have learned."
Coulson resigned as Downing Street communications director in January. He was arrested on July 8 on suspicion of phone-hacking and paying police for information, but denies any wrongdoing.
Cameron refused to cut Coulson loose, however, telling lawmakers: "I have an old-fashioned view about innocent until proven guilty but if it turns out I have been lied to that would be a moment for a profound apology."
The Times and The Guardian reported on Thursday that Cameron only gave Coulson basic security clearance when in office -- two levels below predecessor Alastair Campbell -- raising questions about Cameron's trust in the former reporter.
Opposition Labour party leader Ed Miliband demanded a full apology from Cameron, accusing him of a "deliberate attempt to hide from the facts about Mr Coulson."
The scandal has so far forced Murdoch to close down the News of the World, claimed the jobs of two of his top aides, and has rocked his global News Corporation empire while also forcing two senior British policemen to resign.
Australian-born Murdoch, now a US citizen, flew out of Britain on his private jet Wednesday after an 11-day visit during which lawmakers grilled him on what he termed the "most humble day of my life".
A law firm banned by News International from responding to claims it sat on evidence of widespread wrongdoing at the media giant was Wednesday authorised to talk to police and lawmakers.
Harbottle & Lewis held hundreds of internal emails from the News of the World after being hired by News International to fight a case of wrongful dismissal brought by former reporter Clive Goodman, who was jailed for hacking in 2007.
Parliament speaker John Bercow announced an inquiry into how a protester was able to attack Murdoch with a foam filled "custard pie" at the parliamentary hearing on Tuesday, at which Murdoch's son James was also questioned.
The Murdoch-owned Sun newspaper praised his "plucky" Chinese-born wife Wendi Deng for hitting his alleged assailant, while China's huge online community hailed the "Tiger mother" for her actions.
Police on Wednesday charged Jonathan May-Bowles, 26, over the attack.
It was Cameron's turn to take the heat over the controversy on Wednesday.
He admitted that another arrested former executive of the paper, Neil Wallis, may have advised Coulson before last year's general election but said his Conservative party had not paid him.
The premier also sought to play down his friendship with Rebekah Brooks, who until last week was chief executive of News International, the mogul's British newspaper arm, amid reports the pair regularly saw each other.
"I have never held a slumber party or seen her in her pyjamas," he said, in reference to reports that former Labour premier Gordon Brown's wife Sarah hosted a get-together in 2008 for influential media women, including Brooks.
Earlier Wednesday lawmakers released a report criticising attempts by News International to "thwart" phone-hacking investigations and blasting a "catalogue of failures" by police.
The scandal first emerged in 2006 with the conviction of a former News of the World journalist and a private investigator for hacking the phones of members of the royal family.
But evidence that the practice was widespread lay untouched until the investigation was reopened in January and the row exploded this month when it emerged that the phone of a murdered teenaged girl, Milly Dowler, was also hacked.
Scotland Yard said Wednesday it was boosting the investigation team from 45 officers to 60 after a "significant increase in workload."
Home Affairs Committee chairman Keith Vaz responded: "This is excellent news. The extra resources will assist to help move things along much more quickly.