David Cameron hails deal on Leveson as defending free press without 'fundamentally wrong' legislation for regulator

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David Cameron has insisted the cross-party deal reached in the early hours of today on a royal charter on press regulation defends the principle of a free press.

The Prime Minister, who was granted an emergency Commons debate on the proposed new system in response to Lord Justice Leveson's report on press standards, said the new regulator would not be set up by legislation - an approach he claimed was “fundamentally wrong in principle”.

The approach of using a royal charter to back the new regulator was agreed by Mr Cameron, Deputy Prime Minister Nick Clegg and Labour leader Ed Miliband in a last-ditch deal to avert a Commons showdown.

But Mr Cameron acknowledged that legislation was necessary to establish a system of exemplary damages for newspapers that did not sign up to the regulator.

He also confirmed that the need for two-thirds of parliamentarians in the Commons and Lords to change the royal charter would be enshrined in law.

But he insisted: “It is legislation to protect the royal charter, it is not legislation to recognise the royal charter.”

Mr Cameron said the royal charter would be submitted to the Queen for approval at the May meeting of the Privy Council.

He said: "What happened to the Dowlers, to the McCanns, to Christopher Jefferies and to many other innocent people who have never sought the limelight was utterly despicable. It is right that we put in place a new system of press regulation to ensure that such appalling acts can never happen again. We should do this without any further delay."

The Prime Minister added: "As Lord Justice Leveson recommended, we need a system of tough, independent self-regulation that will deliver for victims and meet the principles set out in his report.

"This system will ensure upfront apologies, million-pound fines, a self-regulatory body with independence of appointments and funding, a robust standards code, an arbitration service that is free for victims and a speedy complaint handling mechanism.

"We can put all of this in place without the need for statutory regulation."

The three main political parties today reached the outline agreement on the new system for regulating the press after last-ditch talks which went on until the early hours of this morning.

The dramatic twist headed off the threat of an embarrassing Commons defeat for David Cameron tonight.  The Prime Minister ended the three-party  negotiations last Thursday when he rejected Labour and Liberal Democrat demands for a Royal Charter setting up a new regulatory system to be underpinned by law, and said the issue would be resolved by MPs today.

But the talks were restarted over the weekend and the differences between Mr Cameron on the one hand and Ed Miliband and Nick Clegg on the other were gradually whittled away. The crucial breakthrough came in a marathon session in the Labour leader’s Commons office  which ended at 2.30am today. It was attended by Mr Miliband, Mr Clegg and Oliver Letwin, the Conservatives’ policy chief who produced the Royal Charter option after Mr Cameron rejected the statutory underpinning recommended by Lord Justice Leveson in his report last November. The Prime Minister did not attend the talks but was kept informed throughout.

Today the Tories and Labour both claimed victory as they  put a different gloss on the outline agreement before MPs were given the details in the Commons and Lords this afternoon.

Maria Miller, the Conservative Culture Secretary, said the Tories had “stopped Labour’s extreme press law.” She insisted: “This is not statutory underpinning. I think now there’s a very clear acceptance from Labour, from the Liberals that the Prime Minister’s Royal Charter is the right way forward and we should stop the extreme version of press law that has been tabled, and I understand the Labour party would be voting against that if it were pressed to a vote in the Commons today.”

But Mr Miliband insisted that the  Royal Charter proposed by Mr Clegg and himself on Friday would be “underpinned by statute.”  He said the new system would protect both a free press and the victims of the abuse of press power, who would have proper redress and a complaints system with teeth under an independent body that would ensure the press  no longer “marks its own homework.”

A Labour source said: “This is not a little bit of statute, this is not a dab of statute, this is statute pure and simple.”

Liberal Democrats hailed Mr Clegg’s pivotal role in brokering a deal and standing firm with Mr Miliband when Mr Cameron called the bluff of the two other leaders last week. Lib Dem sources said the Deputy Prime Minister’s goal all along was an all-party consensus, so that any agreement would last and not be changed by a future government.

It remains to be seen whether the newspaper industry as a whole will sign up to the deal reached by the politicians. The owners of the Mail, Telegraph titles and Rupert Murdoch’s News International, which owns The Times and The Sun, have considered setting up their own regulatory system and may take legal advice on the three-party agreement.