Labour MP Siobhain McDonagh accepted "very substantial" damages and a public apology at the High Court in London yesterday over phone hacking.
The court heard that her private mobile telephone was stolen from her car in October 2010.
Police told the Mitcham and Morden MP last June that they had "obtained evidence that The Sun newspaper had accessed her text messages from about October 2010 and therefore appeared to have accessed and/or acquired her mobile phone," her lawyer David Sherborne said in court.
A QC told the court on behalf of the newspaper that it accepted that her mobile phone "should not have been accessed and used, and furthermore accept that there has been a serious misuse of her private information."
Mr Sherborne said the defendants, the publishers and/or owners of The Sun, had agreed to pay Ms McDonagh "very substantial damages" and her legal costs.
Foreign Minister Alistair Burt's admission that the Cameron government has "supported" a survey of attitudes to US drone strikes in Pakistan's tribal areas amounts to a tacit admission of British involvement.