The Government yesterday raised for the first time the prospect of a wide-ranging independent inquiry into the conduct of newspapers in the wake of the News of the World phone-hacking scandal.
In an indication of the way ministers are preparing to respond to growing calls for lessons to be learned from the long-running investigation into Britain's top-selling paper, the House of Lords was told that one area for action could be the establishment of a statutory commission to regulate press standards in place of the current system of self-regulation.
The thorny question of formal regulation of newspapers, long resisted by the industry as a threat to press freedom, was put forward a day after the release on police bail of the chief reporter and a former senior executive of the NOTW following their arrest on suspicion of conspiracy to intercept the mobile phone voicemails of public figures.
Yesterday's dramatic development coincided with the escalation of an extraordinary dispute between Keir Starmer QC, the Director of Public Prosecutions, and John Yates, the Acting Deputy Commissioner of the Metropolitan Police, which has again put Scotland Yard's handling of the original investigation into phone-hacking under the spotlight.
Chris Bryant, a Labour MP who raised concerns that his phone was being hacked long before the Yard launched its investigation into the activities of private investigator Glenn Mulcaire in 2005, said that Mr Yates and Andy Hayman, the head of counter terrorism who led the original investigation, had "plenty of questions to answer" about the apparently limited scope of police inquiries.
In evidence to MPs on Tuesday, Mr Starmer contradicted a statement by Mr Yates that legal advice from the Crown Prosecution Service restricted the number of victims of phone-hacking to just a "handful" of individuals.
Amid the increasing furore about the conduct of journalists and the police and prosecutors appointed to investigate them, former Conservative and Labour Cabinet ministers joined forces to demand action over the excesses identified at the NOTW, which is facing renewed allegations of wrongdoing and multiple damages claims from alleged victims of phone-hacking.
Lord Prescott, the former deputy prime minister, said the seriousness of the claims against Rupert Murdoch's News International meant the takeover by its parent company, News Corporation, of BSkyB should be delayed until the phone-hacking inquiry is complete.
The former deputy Labour leader, who has been told his messages may have been targeted, also accused News Corp of being "actively involved at all levels in criminal acts".
Lord Wallace of Saltaire, the Government spokesman responding to the debate, said ministers recognised a "need" to answer concerns about the failure to prevent the phone-hacking scandal, indicating that an independent inquiry could be set up once criminal investigations are complete.
He said: "The relationship between the press and the Government rests upon the idea that a free press in a democracy is free but should be responsible – just as bankers in a free market ask for light regulation with the expectation that they will also behave responsibly. Newspapers, like bankers, have not always been as responsible as they might have been in recent years."
When asked whether the inquiry, requested by former health secretary Lord Fowler, should consider the replacement of the self-regulatory Press Complaints Commission with a statutory body, Lord Wallace said: "That is very much one of the larger issues which I think it would be appropriate for the sort of general inquiry which Lord Fowler is calling [for]."
Yesterday, the Yard was awaiting a letter from Labour MP Keith Vaz, chairman of the Home Affairs Select Committee, asking Mr Yates to respond to Mr Starmer's claim to MPs.
Key figures in the legal process
Acting Deputy Commissioner, Metropolitan Police
His position In 2009 Mr Yates backed the original inquiry, saying there had been only "10 to 12" victims – because under Regulation of Investigatory Powers Act (Ripa) police had to prove messages had been intercepted before being heard by the phone's owner. He has repeatedly stressed police were only following CPS guidelines.
The questions Why did he take only a few hours in 2009 to back the original inquiry? Why did he say there were only a few victims when there appear to have been hundreds? Why did he stick to his interpretation of Ripa when this was sidelined in the Goodman and Mulcaire case?
What next? MPs likely to demand fresh answers.
Former Metropolitan Police assistant commissioner, now a columnist for News International
His position As the head of the original Yard investigation in 2006, Mr Hayman was responsible for the prosecution of NOTW royal editor Clive Goodman and private investigator Glenn Mulcaire. Decided to limit the inquiry to a "handful" of victims and said that if there was the "slightest hint" others had been involved in hacking it would have been investigated.
The questions Why did his inquiry fail to inform thousands of potential victims and not question individuals such as chief reporter Neville Thurlbeck? Why did he dine with NOTW staff in April 2006 during a live investigation into allegations of criminality at the paper?
What next? Unclear. Mr Hayman is now retired.
Director of Public Prosecutions (2008-)
His position In 2009, he said there was no reason to reopen the police investigation or CPS files. Although this was never CPS policy in the Goodman and Mulcaire case, he told MPs then that Ripa required messages to have been intercepted before they had been heard by their intended recipients. In October 2010, he changed this position, but does not accept CPS advice limited the police investigation.
The questions Why did he state baldly that messages had to be unheard? Why has he never apologised for this statement? What was his motivation for making it?
What next? Unclear. MPs praised his clarity and transparency this week, but did not closely question him on his 2009 statement.
Director of Public Prosecutions (2003–2008)
His position As head of the Crown Prosecution Service, the QC should have overseen its handling of phone-hacking. However, he was reported to have had no active involvement in the case on the grounds that Andy Coulson, then editor of the News of the World, was a personal acquaintance.
The questions Did Mr Macdonald have any involvement at all in the case? Why was his recollection of the detail "understandably limited" when he was asked about the case by his successor Keir Starmer in 2009, as Mr Starmer stated this week?
What next? Probably nothing. There have been no calls for Mr Macdonald, now Baron Macdonald of River Glaven, a Liberal Democrat peer, to face MPs.