He is due to attend a police station in London top be quizzed further over claims he directed or allowed staff to intercept mobile phone voicemails while he was editor at the News of the World.
It was being reported he will also be quizzed over what he knew about payments paid to corrupt police officers.
Mr Coulson, 43, was a one-time ally of News International chief executive Rebekah Brooks when they both worked at News of the World sister title The Sun. But insiders say there is now open hostility between them.
Today a source close to News International told wownews.co.uk: “Andy Coulson knows where the bodies are buried.
“From day one of this whole scandal the name of the game has been to hush everything up. Goodness knows how much poor old Clive Goodman got to go to jail and keep quiet, but it wasn't enough.
“But of course everything has changed now and the perpetrators will be very frightened.”
Coulson's expected arrest is also damaging to David Cameron, who employed him as his director of communications until January this year, when he was forced to step down over the phone hacking scandal.
The journalist could face a lengthy prison sentence. Intercepting voicemail messages carries a maximum two-year sentence while bribing police officers theoretically carries a maximum life sentence.