The Leveson inquiry into British media ethics has proved to be a double whammy for Prime Minister David Cameron as the report has exposed divisions within the ruling coalition while the victims of press abuse accused him of "ripping the heart and soul" of the judge's key recommendation.
Lord Justice Brian Leveson yesterday called for setting up a new independent media watchdog - which he said should be underpinned by legislation.
Leveson found that behaviour of the British media was "outrageous" and "wreaked havoc with the lives of innocent people".
He said the press - having failed to regulate itself in the past - must create a new and tough regulator but it had to be backed by legislation to ensure it was effective.
Currently, the British press is self-regulated through the Press Complaints Commission (PCC).
But Leveson, who based his report on eight months of testimony from hacking victims, politicians and media figures, said that a statutory body such as Ofcom should take responsibility for monitoring an overhauled PCC.
However, the 2,000-page report exposed divisions in the coalition government, with Cameron opposing statutory control, unlike his deputy Nick Clegg, who wants a new law introduced without delay.
Cameron had set up the inquiry last year after it emerged that journalists at the now-defunct News of the World tabloid of Rupert Murdoch had hacked the phone of Milly Dowler, a 13- year-old murdered schoolgirl, as well as targeted dozens of crime victims, celebrities and politicians.
Speaking in the House of Commons yesterday, Cameron said he broadly welcomed Leveson's principles to change the current system but that he had "serious concerns and misgivings" over bringing in laws to underpin any new body.
Cameron threatened to veto the central recommendation of the Leveson Inquiry as new press laws would "cross the Rubicon" and undermine the centuries-old principle of free speech.
He urged the House of Commons, a "bulwark of democracy", to think "very, very carefully" about such a move.
The findings of the official inquiry were backed by Clegg and Labour leader Ed Miliband who are now expected to join forces in an attempt to push through new press laws.
The issue could present the biggest crisis yet faced by the Coalition.
But British Culture Secretary Maria Miller denied there is a big split in the cabinet, insisting there are merely "issues of implementation".
Cameron believes this process will only serve to highlight how difficult it is to try to legislate in a complex and controversial area while Labour and the Lib Dems think it will demonstrate the opposite.
Speaking on BBC Breakfast, Miller said: "Our concern is that we simply don't need to have that legislation to achieve the end of objectives and in drafting out this piece of legislation what we are going to be demonstrating is that it wouldn't be a simple two-clause bill.
" In a series of interviews, she said new laws setting up a press watchdog could ultimately stop newspapers properly reporting parliament and holding politicians to account in future.
"It provides a legislative framework for government to put in place things that impinge on press freedom, for example the way the press reports parliament," she said.
Meanwhile, media reform campaigners and some of those who had their phones hacked or computers compromised said they were "profoundly depressed" by Cameron's refusal to follow the recommendation of Leveson.
Speaking at a press conference organised by the Hacked Off campaign, the filmmaker Ed Blum – himself a victim of hacking – accused Cameron of abandoning those he had pledged to help.
"I think with Cameron's statement, he's let down the victims of press abuse," he said.
"He's also ripped out the heart and soul of the Leveson report and at the same time...," he was quoted as saying by the Guardian.
Mark Lewis, the solicitor who represents a number of phone-hacking victims, including the family of Dowler, said some of his clients were struggling to understand the prime minister's behaviour.
"The politicians were in on this and somebody independent was coming along and made recommendations and cautious optimism lasted for about 45 minutes and then the prime minister spoke and said well he's not actually going to implement a report that he instigated," Lewis said.
Meanwhile, following cross-party talks last night - which will resume next week - the Department for Culture, Media and Sport will begin the process of drawing up a draft bill implementing the Leveson recommendations.
It is thought the draft legislation may be ready in a fortnight, the BBC reported.
Miller said: "the gauntlet has been thrown down" to newspapers to outline how they would set up tough self-regulation instead.
But Gerry McCann, the father of missing Madeleine McCann, said the Leveson report has not "gone far enough".
She went on: "At this point what we should be focusing in on is the fact that the gauntlet has been thrown down to the industry.
"The press industry need to be coming back with their response to the Leveson report. Their response to how they're going to put in place a self-regulatory body that adheres to the Leveson principles and that is what I want to see moving forward swiftly."
Many of Friday's newspapers have praised Cameron's opposition to law-backed regulation.
But the father of Madeline McCann - the young girl who went missing in Portugal in 2007 - said he would have liked the report to have gone further.
"Although we broadly welcome Lord (Justice) Leveson's report, and it has many merits, for me, personally, I don't think the report has actually gone far enough," said Gerry McCann.
He said: "I would have liked to have seen a properly independent regulation of the press, whereas I think he has given the press another opportunity of self-regulation".
McCann, who was the subject of what he called "unbelievably damaging" newspaper reports told BBC Radio 4's Today programme: "Full implementation of Lord (Justice) Leveson's report is the minimum acceptable compromise for me and, I think, for many other victims who have suffered at the hands of the press. Without statutory underpinning, this system will not work".