Miliband outlines new Bill to set up independent press regulator

Draft Bill will heap pressure on the Tories while appeasing Liberal Democrats

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Labour will today publish a draft Bill to implement Lord Justice Leveson's proposal for a new independent press regulator, to be overseen by a body backed by statute.

Significantly, Ed Miliband's proposed law will be welcomed by the Liberal Democrats in a move that will put more pressure on David Cameron, who is resisting the Leveson Inquiry's call for the new system to be underpinned by law.

Mr Miliband discussed the issue in a telephone call with Nick Clegg last week. Labour is also holding private talks with senior Conservative MPs as it tries to build a parliamentary majority for the approach favoured in last month's Leveson Report. It amended its draft Bill in the light of the soundings it has taken with the two other main parties.

Labour will drop its initial backing for Lord Justice Leveson's plan for the body that will replace the much-criticised Press Complaints Commission to be overseen by Ofcom, the broadcasting regulator. This idea has been opposed by Mr Clegg and Mr Cameron, who do not want to see Ofcom's remit extended to newspapers.

Instead, Labour proposes that a panel headed by the Lord Chief Justice, aided by advisers, would recognise a new Press Standards Trust and give it a "health check" every three years to see whether it is carrying out its work properly. The review would look at the make-up of the trust board, its record on investigating complaints and its code of practice, including guidance on the definition of public interest.

The trust could impose fines only in cases of serious and systematic non-compliance. The draft Bill would require ministers and public agents to protect press freedom.

Liberal Democrats welcomed Labour's six-clause draft Bill as "a good piece of work". But Mr Clegg wants stronger guarantees than in Labour's current version to prevent it being amended by a future government into an Act that could inhibit press freedom – a major fear of opponents of a press law, including the newspaper industry and Mr Cameron.

Allies of Mr Clegg denied that the Deputy Prime Minister was joining forces with Mr Miliband, right, against Mr Cameron, insisting that he was trying to forge a consensus. They said he was holding regular discussions with the Prime Minister over the next moves on Leveson.

Cross-party talks will resume later this week. The Government is drawing up its own draft Bill, but the process got off to a bad start when ministers pointed out how difficult it would be to frame a Leveson-style law. Mr Clegg is insisting that the Government's Bill is a "serious piece of work" undertaken in good faith.

A senior Liberal Democrat source said: "We welcome the publication of Labour's Bill as an important contribution to the cross-party talks. Although there is more work to be done to ensure that legislation is proportionate and workable, it demonstrates that it should be possible to achieve this goal.

"[Our] focus... will be to work to further improve the Bill to make it very difficult to amend in the future. Liberal Democrats look forward to discussing this Bill with all parties alongside the draft the Government is currently working on."

Downing Street is studying the idea of creating the new press regulator by Royal Charter, the system used to protect the BBC from political interference. But Labour is worried that this could leave the power to amend the charter in the hands of privy councillors, most of whom are government ministers.

Labour hopes to win a majority for its draft Bill, with the help of Liberal Democrat and Tory MPs, in a Commons vote before the end of next month. But Mr Cameron could still hold the whip hand, since he could ignore the vote and legislation would need to be introduced by the Government.

Labour's response to Leveson: the key proposals

Labour will not call for Ofcom to oversee the new press regulator

A senior judge should instead provide oversight for the body

Ed Miliband is concerned that a royal charter could lead to political inteferance

MPs are anxious to ensure the system cannot simply be altered at a later date

The party is trying to balance regulatory powers with press freedoms