Prince Harry, Elton John Sue Associated Newspapers for Alleged Phone Tapping

Prince Harry and Elton John believe their phones were tapped and personal info was stolen ... and now they're teaming up to go after a major news outlet who they believe is behind it, though the company is flatly denying the claims.

The Duke and the British rock star are part of a group of plaintiffs taking Associated Newspapers to court, claiming the company behind the Daily Mail and other publications hired investigators to put listening devices in people's homes and cars and paid police to dig up sensitive info.

The group is also reportedly accusing the Daily Mail publisher of tapping into phone convos, impersonating hospital staff to access medical info, and even gaining access to bank accounts and finances through illicit means and manipulation.

The company has denied these allegations, a spokesperson tells us, "We utterly and unambiguously refute these preposterous smears which appear to be nothing more than a pre-planned and orchestrated attempt to drag the Mail titles into the phone hacking scandal concerning articles up to 30 years old."

"These unsubstantiated and highly defamatory claims - based on no credible evidence - appear to be simply a fishing expedition by claimants and their lawyers, some of whom have already pursued cases elsewhere."

Other folks involved in the suit reportedly include ... Elton John's husband and producer David Furnish, Elizabeth Hurley, Sadie Frost, and Baroness Doreen Lawrence -- mother of a Black British teen who was infamously murdered.