A British inquiry yesterday called for a tougher watchdog underpinned by new laws to curb the country's press in a damning verdict that sets up Prime Minister David Cameron for a political battle.

Senior judge Brian Leveson, who led an eight-month inquiry sparked by the phone-hacking scandal at Rupert Murdoch’s News of the World tabloid, said there should be an independent self-regulatory body, underpinned by legislation.

But Cameron voiced concerns about any statutory change, putting him on a collision course with his junior coalition partners, the Liberal Democrats, the Labour Opposition and many hacking victims.

Lord Justice Leveson said in his report that the British newspaper industry had for decades “wreaked havoc with the lives of innocent people” and ignored the codes that it had itself set up.

He said that while the press served the country “very well for the vast majority of the time”, its behaviour “at times, can only be described as outrageous”.

The Prime Minister commissioned the Leveson Inquiry in July 2011 in the wake of a report alleging that the News of the World hacked the voicemails of murdered schoolgirl Milly Dowler as well as the revelation that dozens of public figures had had their phones hacked. Murdoch was forced to shut down the 168-year-old newspaper over the scandal.

Victims of phone hacking and press harassment welcomed the inquiry's findings and called on Cameron to implement them in full. But Cameron told Parliament that while he backed the creation of a new newspaper regulator, he feared that bringing in new laws risked curbing the freedom of the British press. (AFP)