Pellicano, gumshoe to the stars, is facing 110 charges from the Los Angeles authorities, which allege that his clients in business and divorce disputes gained unfair advantages from “confidential, embarrassing or incriminating” information he gleaned from illegal snooping.

So far Pellicano’s case has roped in mainly B-list names — Sylvester Stallone was a target. But last week the case moved up the food chain to take in one of the world’s richest men, his former wife and a top Hollywood lawyer.

Federal prosecutors said they have more names on their list and their investigations are continuing. Hollywood insiders are waiting to see who is next.

Pellicano made his living solving problems for Hollywood’s elite, sometimes in theatrical style. A nosey reporter found a bullet hole in her car windshield along with a dead fish with a rose in its mouth and a note saying STOP.

State prosecutors claim that Pellicano’s enemies had their phones bugged and that police officials were bribed to hand over information on them.

When the authorities raided Pellicano’s office in 2002 they found $200,000 (£114,000) in cash, plastic explosive and a couple of grenades. But the real dynamite was contained in the allegedly illegally obtained tapes and transcripts of telephone conversations between some of the biggest and most powerful names in Hollywood.

Not since the police investigation of Los Angeles madam Heidi Fleiss have so many of Hollywood’s hottest felt so exposed.

“This is going to be really embarrassing,” said Charles Fleming, author of High Concept: Don Simpson and the Hollywood Culture of Excess, a study of tinseltown mores. “Some people appear to have broken the law and may have to go to jail, that much is evident.”

But the real damage may come when details are exposed in court documents, he said.

The first high-profile embarrassment has been of Kirk Kerkorian, billionaire investor and former owner of the MGM studios. Kerkorian's lawyer, Terry Christensen, pleaded not guilty last week to charges that he conspired with Pellicano to tap the phone of Kerkorian’s former wife during a fierce child-custody battle.

Lisa Bonder Kerkorian, a 40-year-old former tennis pro, was married to Kerkorian, 88, for one month. She originally claimed a record-breaking $320,000 a month in support to pay for private jet flights, hotels, horses and parties for her daughter Kira, who was four at the time.

Kerkorian disputed paternity and was later sued by the film producer Steve Bing for allegedly hiring someone to dig through his rubbish in search of dental floss to prove — through DNA evidence — that he was Kira’s father.

Prosecutors claim that Christensen paid Pellicano at least $100,000 to illegally tap Bonder Kerkorian’s phones. Details of the phone records could come out in court, causing more embarrassment for the press-averse Kerkorian.

Thirteen people have been charged so far in the case but Christensen is the name that has media executives most worried.

He has denied any wrongdoing and his office has said his only involvement with Pellicano was in 2002 when death threats were being made against one of Christensen’s clients and his daughter — believed to be Kerkorian and Kira.

Christensen is a big player in Hollywood. He also sits on the board of Las Vegas casino MGM Mirage and was, until his resignation nine days ago, on the board of the insurer Fidelity National Financial.

“This isn’t some tacky shamus [private eye] getting caught out,” said one media executive. “If they charged him, there must be some really nervous people out there.”

Privately, some media analysts are wondering whether Hollywood has taken note of the new landscape in corporate America. Rules brought in after the crackdown on Wall Street mean there are now serious consequences for corporate misdemeanours. Under the Sarbanes-Oxley legislation introduced in 2002, chief executives carry more responsibility for the behaviour of their executives. All the big film studios are now owned by large media companies. Their bosses may have tidied up their behaviour, but has Hollywood?

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