* Coulson, Brooks charged with phone hacking
* Alleged victims included Angelina Jolie, Brad Pitt
* Six other senior Murdoch newspaper staff charged
* Development embarrassing but not fatal for Cameron
By Michael Holden and Kate Holton
LONDON, July 24 (Reuters) - Prime Minister David Cameron's ex-media chief and Rupert Murdoch's former UK newspaper boss are to be charged with phone-hacking offences in the most significant development in a scandal that has rocked Britain's establishment.
Prosecutors said on Tuesday that Andy Coulson, Cameron's communications director for four years until 2011, and Rebekah Brooks, who oversaw Murdoch's News International, would face charges of conspiracy to intercept communications.
The alleged offences were committed between 2000 and 2006 when both served as editor of the News of the World, the salacious Sunday tabloid which Murdoch was forced to close a year ago amid public disgust at the phone hacking revelations.
Among the alleged victims were two former home secretaries (interior ministers), former England soccer manager Sven-Goran Eriksson, Hollywood stars Angelina Jolie and Brad Pitt, former Beatle Paul McCartney and a minor member of the royal family.
Brooks and Coulson are also both accused of involvement in hacking the telephone of Milly Dowler, a missing schoolgirl who was later found murdered in 2002.
It was the revelation that News of the World journalists had hacked her phone that triggered a furore that engulfed Murdoch's News International and ultimately led to the closure of the 168-year-old News of the World.
"I am not guilty of these charges," Brooks said in a statement. "I did not authorise, nor was I aware of, phone hacking under my editorship.
"The charge concerning Milly Dowler is particularly upsetting not only as it is untrue but also because I have spent my journalistic career campaigning for victims of crime. I will vigorously defend these allegations."
Six other senior former News of the World journalists and staff, including the former managing editor, are also to be charged - a formality to be completed by police on Tuesday.
The maximum sentence for the phone-hacking charges is two years in prison and/or a fine.
The development is particularly embarrassing for Cameron because Coulson was also charged with hacking the phones of David Blunkett and Charles Clarke, two former home secretaries from the now-opposition Labour Party.
"That is an astonishing development and I think that is almost inevitably going to rebound on Cameron," Steven Barnett, professor of communications at Westminster University, told Reuters. "That is going to pose some very very awkward questions for the prime minister."
Alison Levitt, Principal Legal Adviser to the Director of Public Prosecutions, said she had concluded there was sufficient evidence to charge the eight suspects with 19 offences over the illegal accessing of voicemails on the mobile phones belonging to politicians, celebrities and sporting figures.
News International had for years denied that phone hacking was widespread after the tabloid's former royal reporter and private detective were jailed in 2007 for the crime.
LACK OF JUDGMENT
Coulson resigned in the aftermath, and took up the role as director of communications of Cameron's Conservative Party, helping to shape his campaign to become prime minister.
Critics say Cameron appointed Coulson in order to secure the backing of the journalist's former boss, Murdoch, and say the appointment showed a shocking lack of judgment.
The involvement of Coulson and Brooks - a close friend to Cameron - turned the long-running hacking story into a national political scandal that has laid bare the collusion between senior politicians, the police and the media.
Brooks, her husband and her personal staff have already been charged with attempting to pervert the course of justice over the hacking case, while Coulson has been charged in Scotland with perjury after he denied in an unrelated court case any knowledge of phone hacking.
Brooks, wooed by a string of politicians and prime ministers first in her role as editor of the News of the World and Sun tabloid, and then as the head of Murdoch's British newspaper arm News International, was one of the most powerful women in Britain, instantly recognisable by her long, curly red hair.
She was also close to Cameron, socialising with him over Christmas breaks, and both were embarrassed earlier this year when an inquiry into media ethics read out text messages sent between the two.
Cameron used to sign his frequent text messages to Brooks with an affectionate "LOL", which he thought stood for "lots of love".
Paul Farrelly, an opposition Labour lawmaker who questioned Rupert Murdoch and his son James as part of a parliamentary committee investigation into the hacking, said Tuesday's developments were damaging, but not fatal, for Cameron.
"My view is that what happens to Andy Coulson and Rebekah Brooks reflects on David Cameron's judgment in both the appointment of Coulson and in being seen to be so close to a certain newspaper empire," he told Reuters.
"Because it's been going on so long, it's in no way fatal to his premiership. What is more important to the survival of his premiership and the coalition is the economy."