The independent inquiry into phone hacking will have the power to summon newspaper proprietors, journalists, police and politicians to give evidence under oath and in public, Prime Minister David Cameron said today.
Mr Cameron named Lord Justice Leveson as the chair of the inquiry, which will look into the ethics and culture of the British media as well as the specific claims about phone hacking at the News of the World, the shortcomings of the initial police inquiry, and allegations of illicit payments to police by the press.
The Prime Minister set out the remit of the single inquiry - which replaces his previous proposal for two separate investigations - shortly after telling the House of Commons that those responsible for phone hacking should be prosecuted.
In fiery exchanges at Prime Minister's Questions, Mr Cameron said that his former head of communications Andy Coulson should be prosecuted if it is proved that he lied when he claimed to know nothing about phone hacking at the News of the World while he was editor.
Meanwhile, it was announced that News International's long-serving legal manager Tom Crone has left the company. Mr Crone was responsible for advising the News of the World and the Sun on editorial matters before and after publication.
In a statement to MPs, Mr Cameron said the inquiry led by Lord Leveson - the barrister who prosecuted Rosemary West - would be "one that is as robust as possible, one that can get to the truth fastest and get to work the quickest, and one that commands the full confidence of the public".
The inquiry should report on the regulation of the press within 12 months, but its investigations into allegations of wrongdoing in the press and police is expected to report later, once criminal proceedings have concluded.
A Metropolitan Police team led by Deputy Assistant Commissioner Sue Akers has made eight arrests and is currently looking through 11,000 pages of documents seized from private investigator Glenn Mulcaire in 2005 and has identified 3,870 names, and around 4,000 mobile and 5,000 landline phone numbers.
Mr Cameron said Lord Leveson will deliver recommendations for "a new, more effective way of regulating the press - one that supports their freedom, plurality and independence from government but which also demands the highest ethical and professional standards" as well as recommendations about the future conduct of relations between politicians and the press.
The second part of his inquiry will look specifically at the extent of unlawful or improper conduct at the News of the World and other newspapers; the way in which management failures may have allowed this to happen; the failings of the original police investigation and the issue of corrupt payments to police officers.
"No one should be in any doubt of our intention to get to the bottom of the truth and learn the lessons for the future," said Mr Cameron, who earlier told MPs that a "firestorm" had engulfed Britain's press, police and political system as a result of the phone-hacking allegations.
Mr Cameron called for "root and branch change" at News International and said those responsible for the "disgraceful" hacking into private phone calls should be prosecuted.
And he made clear that this could include Mr Coulson, telling MPs he had been appointed Downing Street's director of communications on the basis of "assurances he gave me that he did not know about the phone hacking, he was not involved in criminality".
"He gave those self-same assurances to the police, to a select committee of this House and under oath to a court of law," said Mr Cameron.
"If it turns out he lied, it won't just be that he shouldn't have been in government, it will be that he should be prosecuted."
Labour leader Ed Miliband called on the Prime Minister to apologise for his "catastrophic error in judgment" in appointing Mr Coulson to a position at the heart of Government, after he had resigned as News of the World editor after two people working for the paper were jailed for phone hacking.
And Mr Miliband said another former News of the World editor, Rebekah Brooks, should be removed from her current position as News International chief executive, branding her continued employment by the company an "insult" to the family of murdered teenager Milly Dowler, whose family were watching from the public gallery.
Mr Miliband welcomed the terms of the inquiry set out by Mr Cameron and said it should be staffed and running before Parliament breaks up for its summer recess on July 19.
"The revelations of the past week have shocked the whole country and the public now rightly expect those of us in this House - those who represent them - to provide not just an echo for that shock, but the leadership necessary to start putting things right," said the Labour leader.
"People like the Dowler family and other members of public who are the innocent victims of phone hacking deserve a full and comprehensive inquiry. They need us to get on with the inquiry, to make it fully comprehensive, and to get to the truth."
Mr Cameron said he will ask Cabinet Secretary Sir Gus O'Donnell to look at whether the ministerial code should be changed to require ministers to record and publish details of their meetings with media proprietors, senior editors and executives.
And he revealed that Metropolitan Police Commissioner Sir Paul Stephenson is planning to appoint a senior public figure to advise him on the ethics that should underpin relations between his force and the press.
Mr Cameron insisted that the Government would be punctilious in "following the law" in its handling of News Corporation's bid to buy the 61% share in satellite broadcaster BSkyB which it does not already own.
The bid was referred to the Competition Commission earlier this week by Culture Secretary Jeremy Hunt, who will make the eventual decision on whether the bid should go ahead in a quasi-judicial capacity.
Mr Cameron added: "In my view, this business should not be focused on mergers and takeovers, but on clearing up the mess and getting their house in order.
"The people involved - whether they were directly responsible for the wrongdoing, sanctioned it, or covered it up, however high or low they go - must not only be brought to justice, they must also have no future role in the running of a media company in our country."
MPs will debate a Labour motion later today urging News Corporation chairman Rupert Murdoch to withdraw his BSkyB bid.
Mr Cameron was accused by Labour of "failing to show leadership" after it was announced he would not attend the debate. Downing Street said he intended to vote on the motion - which is backed by all three major parties - if his schedule allows.
The Prime Minister was meeting the Dowler family this afternoon to discuss the allegations that 13-year-old Milly's mobile phone was hacked by the News of the World, and voicemail messages were deleted, while police were hunting for her following her abduction.
Mr Cameron said: "None of us can imagine what they have gone through.
"But I do know this: They, like everyone else in this country, want their politicians - all of us - to bring this ugly chapter to a close and ensure that nothing like it can ever happen again."
Questioned about Mr Coulson during Prime Minister's Questions, Mr Cameron said his private office did not pass on concerns about the former tabloid editor raised by the Guardian newspaper at the time of his Downing Street appointment.
Guardian editor Alan Rusbridger has said he warned Mr Cameron's office about Mr Coulson's links with private investigator Jonathan Rees, who was then a suspect in a murder investigation for which he was later acquitted.
But Mr Cameron said today the warning did not contain any new information.
"This was not some secret stash of information - almost all of it was published in the Guardian in February 2010 at the same time my office was approached," he said.
"It contained no allegations directly linking Andy Coulson to illegal behaviour, it didn't shed any further light on the issue of phone-hacking, so it wasn't drawn to my attention by my office."Reuse content