AN MP has said newspapers would be “neutered” and “rich bullies” would escape exposure if a new ruling over legal fees is agreed.

Ministers are considering whether to approve a rule change which could force local newspapers like the Telegraph & Argus to not only foot their own legal bill, but also the legal bill of the person who has brought the case in a privacy or libel case - whether they win or lose.

Shipley Conservative MP Philip Davies said such a change would sound the death knell for the newspaper industry stating: “If we want newspapers to hold people to account then we have to enable them to do so.”

Bradford West Labour MP Naz Shah also acknowledged the move could threaten newspapers and the publishing industry, despite the main push for the ruling coming from her Party.

She said it was time a solution was found.

The fallout from any such change could see the industry become vulnerable to threat from claimants and their lawyers, given courage to pursue weak claims for high fees since such claimants will not be burdened with the usual legal costs of failure.

Senior Labour Party figures are urging the government to push ahead with the move, which they say was a cross-party agreement made in the aftermath of a report by Lord Justice Leveson, who recommended an independent regulator underpinned by legislation.

Mr Davies added: “I’m with the newspapers on this, even though I’ve been in the spotlight myself a few times, because I think the proposals are excessive and unreasonable. If we go with the regime that people are asking for, basically newspapers will shy away from challenging anyone in authority because there could be fierce consequences. They would be effectively neutered. Rich bullies would be able to break newspapers for exposing their misdemeanours.

“All that would happen is rich people in authority would have impunity knowing that newspapers would not take them on.

“Local newspapers would end up relying on ‘motherhood and apple pie press releases’ for content. People need to be careful what they wish for.”

Ms Shah added that though she didn’t want to see newspapers prevented from doing their job, it was important, independent press regulation had to be up to standard.

She said: “It is important that independent press regulation is up to the standard that was agreed following the Leveson enquiry,” she said.

“We can’t go back to a situation where those that suffer from press intrusion and abuse cannot get access to justice.

“’However, a free press is essential, and I understand further changes could especially threaten regional and smaller publishers.

“The government has been sitting on this issue for three years, and it is time they found a solution.”

In the wake of the phone hacking scandal, politicians from all the main political parties agreed to set up a new regulator backed by a Royal Charter, despite fears over political interference and the impact it would have on the freedom of the press. The majority of the industry has opted to join an independent regulator - IPSO - which will not be approved by the Royal Charter.

New cost sanctions were written into the Crime and Courts Act 2013 in a bid encourage the newspaper industry to sign up to a cross-party created regulator. Publishers which are part of the approved regulator would be offered protection from the liabilities.

Labour deputy leader MP Tom Watson has led a crusade to ensure the recommendations of the Leveson inquiry are not ignored by the government.

He headed the Culture and Media Select Committee, whose probe into phone hacking led to the setting up of the Leveson Inquiry.

Former shadow culture minister Chris Bryant, who was a victim of phone hacking, said victims were desperate for the government to stand by the promises they made to them in the aftermath of the Leveson report.

Former culture secretary John Whittingdale, who was sacked by new prime minister Theresa May in the summer, deferred commencing the order amid concerns about the effect it might have on the local press, if forced to pay both sides’ costs for winning court cases, vindicating its journalism.

Lynne Anderson, News Media Association deputy chief executive, said: “Forcing newspapers to pay the legal costs of an unsuccessful claimant in a libel or privacy action is not consistent with the principles of a healthy democracy. Local newspaper publishers in particular would be put at risk of crippling legal costs for vindication of their titles’ lawful and responsible reporting.

“If the costs sanctions were brought in, local newspapers would become vulnerable to threats and weak claims from claimants and their lawyers, with an inevitable chill on reporting and the ability to hold power to account. This would be damaging for journalism, the newspaper sector as an industry, and democracy.”

Mr Whittingdale has said that while there is a case for saying, if there is a recognised regulator, that its members will be given the protection afforded under the Leveson recommendations, but added that to impose the cost penalties would simply result in the loss of yet more newspapers.

New culture secretary Karen Bradley recently spoke about the issue when it was raise in the House of Commons, telling MPs she was taking her time to listen to all sides on the matter.

“We want to have a free press, and we want to make sure that we have a strong and vibrant local press. I know from my own local titles just how important they are to people,” she said.

The Crime and Courts Act also made newspapers and publishers which are not recognised by the Royal Charter liable for exemplary damages, something which has already been triggered.

Lord Justice Leveson said in his report that the contribution of regional papers to local life was ‘truly without parallel’.

He said: “Although accuracy and similar complaints are made against local newspapers, the criticisms of culture, practices and ethics of the press that have been raised in this Inquiry do not affect them; on the contrary, they have been much praised. The problem surrounding their preservation is not within the terms of reference of the inquiry but I am very conscious of the need to be mindful of their position as I consider the wider picture.”

Labour MPs Judith Cummins and Imran Hussain and Conservative MP Kris Hopkins did not respond to the T&A's request for comments.