This week, part one of the Leveson inquiry ended with an update from the Metropolitan Police on ongoing investigations into alleged press illegality, and closing submissions from the majority of the core participants.

The Monday morning hearing began with an appearance by Met deputy assistant commissioner Sue Akers, who said a prison officer had been paid thousands of pounds for information by News International, Trinity Mirror, and Express and Star Newspapers. Akers said the prison officer had allegedly been paid a total of £35,000 by the newspaper publishers between April 2010 and June 2011. Payments had been transferred into the officer’s partner’s bank account.

The prison officer retired in June 2011 but apparently received a final payment from Express Newspapers, publisher of the Star and Daily Express, in February this year. The discovery – alongside another revelation that Trinity Mirror allegedly paid another prison officer at high security prison £14,000 between February 2006 to January 2012 – means a probe into illegal payments has been launched at Trinity Mirror and Express Newspapers, according to Akers.

She said the Met had found four stories published in the Daily Mirror, which were believed to refer to information provided by the second officer. The force served notices to the legal departments of Trinity Mirror and Express Newspapers. Akers said Trinity Mirror asked for a production order while Express Newspapers were drawing up a voluntary protocol.  She told the inquiry:

“In our assessment, there are reasonable grounds to suspect that offences have been committed and that the majority of these stories reveal very limited material of genuine public interest.”

Akers said the Met believed some News International material was taken from stolen mobile phones and were working to find out whether the Operation Tuleta investigation has uncovered isolated incidents or “just the tip of the iceberg”.

One of the phones was stolen in Manchester and another in London. The Met will continue to analyse eight to 12 terabytes of data on 70 storage devices in relation to Tuleta – examining alleged phone hacking, computer hacking and the obtaining of personal records by the press. There are currently 101 individual claims relating to the investigation. Six people have been arrested under the Computer Misuse Act or on suspicion of handling stolen goods, and are currently on police bail.

To date, 41 people have been arrested under Operation Elveden – the investigation into payment of public officials by journalists – 23 current or former journalists, four police officers, nine current or former public officials and five other people who allegedly acted as conduits for payments.

Akers said the Met had completed identifying and notifying hacking victims – a total of 4,775 potential victims, of which 2,615 were notified, with 702 individuals “likely” to have had voicemails intercepted. Akers said the figure of “likely” victims had been higher (1,081), but the force was unable to contact all of them.

Fifteen current and former journalists have been arrested and interviewed in relation to phone hacking. Twelve of those remain on pre-charge bail, 11 of whom are due to return to various police stations tomorrow. One individual has been bailed to August 2. One non-journalist has also been bailed to tomorrow.

Akers told the inquiry Will Lewis and Simon Greenberg, of News International’s management and standards committee, no longer attend regular meetings with the Met. She said the MSC had stopped disclosing information to the police from the middle of May until June 13.  She said there was a “change in the nature of the cooperation” between the MSC and police officers after the arrests of Sun journalists earlier this year but said the committee had provided a lot of evidence of “suspected criminality”.

The deputy assistant commissioner agreed to provide Lord Justice Leveson with an update on Elveden, Tuleta and phone hacking investigation Operation Weeting in the autumn.

Lord Justice Leveson then called on the press to give evidence on which journalists used private investigator Steve Whittamore. The judge said newspaper groups had until September 10 to reveal which of their journalists commissioned the investigator – the source of the Operation Motorman files – to obtain personal data and what happened to that information.  The inquiry is likely to sit again in August for a hearing on evidence relating to Operation Motorman. Lord Justice Leveson said he expected more evidence to emerge from submissions, the Motorman hearing and police investigations but it was “comparatively remote” the inquiry would hold more public hearings.

Newspaper publishers will be served with letters, under rule 13 of the Inquiry Rules 2006, informing them of any criticism of their titles in the inquiry’s final report, due in the autumn.

The judge warned newspapers against publishing these letters as “emerging thoughts”, saying to do so would “misunderstand the purpose of the exercise and the position of the inquiry”.

Press reports of the inquiry will continue to be added to official evidence until the final report is submitted to the culture secretary and home secretary.  The judge added:

“I will consider reports that in my view either support or undermine concerns that have been expressed in evidence, I will equally considered the validity of the comments that are critical of the direction or approach of the inquiry.”

Lord Justice Leveson also invited Lloyd Embley, editor of the People, to respond to claims made by Matt Sprake of NewsPics picture agency last week. The inquiry heard how Sprake had been commissioned hundreds of times to follow and photograph public figures and celebrities – largely by the People and the News of the World.

The inquiry then heard a closing submission from the Met, from Neil Garnham QC, which said the decision to close the phone hacking investigation was taken too quickly “with a defensive and closed mindset”. Garnham said the force was willing to acknowledge mistakes and learn from its errors.

The original investigation – Operation Caryatid – was closed down in 2006 and a bid to reopen it in 2009 was quashed by then assistant commissioner John Yates. His review of the investigation took place over the course of one day. Garnham said:

“We frankly admit that there have been incidents which have led to a plain perception of cosiness between particular senior MPS officers and particular journalists. The MPS also acknowledge that its decisions… not to reopen the phone hacking investigation were taken too quickly and with a defensive and closed mindset.”

He said there was no evidence to suggest the force involved in a cover-up of phone hacking at News International, and said core participant victims had “conflated and confused” the perception and reality of relationships between officers and the press. He added:

“It’s right to acknowledge that the decisions were probably taken too quickly and with a defensive mindset that may not have asked the right questions. That was conceded by [fomer Met commissioner] Sir Paul Stephenson and by others subsequent to him, and we respectfully urge you to adopt that. But there is absolutely nothing by way of hard evidence which calls into question the integrity of John Yates when he made those decisions. There’s nothing to show that he was in fact swayed in his decision-making by his friendship with [former News of the World deputy editor] Neil Wallis or his relationship with News International more generally.”

Garnham told the inquiry claims DCS Phillip Williams, the officer who decided not to widen the 2006 investigation, had been influenced by “powerful media friends” were unfounded.

In the afternoon, the inquiry heard closing submissions from Northern & Shell and the Telegraph Media Group.

James Dingemans QC – acting for Northern & Shell, which includes the Daily Star and the Daily Express – said the newspaper industry was too small to be seen as independent and serving editors should not sit on a regulatory body. He recommended appointments to the body be subject to similar rules as judicial appointments. He said:

“There should be no current editors on the regulatory body. This is an industry which is still too small to enable persons to be seen to be independent. Whether they are or not is in some respects not the thing, but [they need to] be seen to be independent of the bodies which they are regulating. So far as individual titles are concerned, and it’s no secret that those that I represent are not current members of the PCC, it is again too small that animosities, or perceived animosities, and loyalties, or perceived loyalties, could undermine what could otherwise be a proper functioning body.”

He later added:

“The constitutional significance of the free press is such that the body appointing the persons to the regulatory body should have protections equivalent to those governing the appointment of the Judicial Appointments Commission.”

Dingemans said the body should have power to deal with standards in order to draw a “further dividing line” between a system of appointments and serving editors. The Northern & Shell submission stated any system providing for speedy, binding and final resolutions would be attractive to publishers. It also recommended accessibility and the consideration of costs for individuals complaining to newspapers, as well as the publications. Dingemans told Lord Justice Leveson it was vital regulation covered the internet as well as the print media. He said society was benefited by a “press fearless of politicians [rather] than the press fearful of politicians” and said an attractive voluntary system would work best.

Lord Justice Leveson said:

“I would like them neither to be fearful of the other, but each to recognise that the other is doing an important job in our democracy.. or is that too much to hope for?”

Dingemans replied: “I suspect, Sir, you would find that in the evidence before you.”

The submission pointed out there was no evidence to suggest phone hacking or computer hacking was carried out by the Daily or Sunday Express, the Daily Star or the Daily Star Sunday, or at OK! Magazine. Dingemans argued that privacy was an important consideration in Lord Justice Leveson’s final recommendations. He said:

“You have to deal with the fact of the different categories of people their approaches to privacy… in our submission there are people who provide details of their private life which others consider to be far too much information – and that you can see from some of the magazines and social media – and there are some people who are happy and content with good press coverage, even where it is intrusive, but are then very unhappy with negative press coverage particularly where it is intrusive, and there are others who are very protective about their privacy full stop and end of story, but people don’t always stay in the same categories, and of course the difficulties of trying to identify that have formed the backdrop to some of the cases before you.”

He later added:

“There has been shown a stunning lack of judgment to the extent that it might engage the criminal law, and I say no more about that, about where lines can properly be drawn between the public interest in acquiring news and privacy.”

Gavin Millar QC, representing the Telegraph, said the Press Complaints Commission had “not evolved fast enough” but argued for a self-regulatory body. He said the press could end up subject to “regulatory burdens flowing from statutory interventions” that internet news providers would escape. Millar said:

“The Telegraph does not want to be subject to a form of regulation which is opposes in principle, that is regulation following statutory intervention, when it does not require to be regulated in this way because it has achieved high standards under the current system. The same point can be made, no doubt, by many other newspaper publishers.”

He added:

“The proposal put forward by PressBof [Press Standards Board of Finance]…may not be perfect, but it does not add to those concerns. It’s a work in progress and will doubtless be refined and improved. By contrast, we’ve not seen any proposals formulated by the inquiry, or by Parliament itself, and that is inevitably and necessarily a matter of concern for us.”

Lord Justice Leveson said he “didn’t understand” TMG’s opposition to statutory underpinning. He said:

“All I can say is looking at the experience of the last 50 years, I’ve seen no evidence of Parliament wanting to get more involved and to go further than the press has been prepared to go…They’ve not been straining at the leash to impose ever more rigorous statutory interventions.”

He reassured Millar he was not planning to recommend a statutory body in the mould of broadcast regulator Ofcom. He said:

“I’d be very surprised if I went down a route that sought to recommend a system that replicated Ofcom. I would be very surprised if I reached that conclusion.”

Millar said TMG were concerned once the “door is open” to statutory intervention, the industry would be in a difficult position. He added:

“The key point from our perspective is that the industry will willingly commit to making these proposals work. This is the best starting point for a new system of regulation. No regulation through a mechanism about which the industry, almost without exception, is sceptical, has the same sort of chance of success.”

Earlier in his submission, he said strict financial and editorial governance systems make it “impossible” for Telegraph reporters to act illegally.

Millar said journalists working for the Telegraph and the Sunday Telegraph would not be able to pay private investigators or bribe officials. Neither of the titles were mentioned in the files of Steven Whittamore, the private investigator whose national newspaper clients were exposed by the Operation Motorman investigation. TMG carried out an internal inquiry last year, going back to 2005, and found no journalists had been involved in phone hacking.  Millar added:

“The Telegraph was and remains appalled at the revelations about phone hacking which led to this inquiry being established. Such activities are a very long way removed from the responsible journalism in the public interest which the Telegraph strives to provide to its readers.”

TMG executive Murdoch MacLennan told the inquiry in January this year, Telegraph journalists “live by” the Press Complaints Commission Code.

On Tuesday morning, barrister David Sherborne delivered a closing statement on behalf of the core participant victims. He said the hacking of missing teenager Milly Dowler’s mobile phone was the “final straw in a groundswell of public opinion” against an out-of-control press.

He said future press regulation must be acceptable to the public rather than the industry. He called for part two of the inquiry – which is to examine the extent of unlawful or improper conduct within News International and other newspaper organisations – to go ahead. Lord Justice Leveson said he had not ruled out continuing with part two, but has said previously proceeding would be difficult with continuing police investigations.

Sherborne gave the example of Bob and Sally Dowler as an example of press malpractice, saying a moment of private grief when the couple retraced the final steps of daughter Milly had been “turned into a photo opportunity” by the News of the World. Bob Dowler was in court today as the closing submission was read.  Sherborne said:

“[Aside from the hacking of Milly’s voicemail] what perhaps was less known to those within the inquiry, and brutally shocking, was the way in which their private moment of grief, retracing the last footsteps of their murdered daughter in a impromptu attempt to obtain some form of respite from the public gaze, became a photo opportunity for one newspaper, which was too damn good to resist.”

He urged Prime Minister David Cameron to implement in the inquiry’s recommendations when they are reported in the autumn.

He said: “I say this to Mr Cameron, the public is tired of promise, it’s tired of the politics of popularity over principles – of its elected representatives kowtowing under the influence of the unelected few, which is what the history of media ownership has proved … [If the proposals are ignored] that would be a failure, not just on the Dowler or McCann test, but for the general public, for everyone except the privileged few who are represented here by the core participant media organisations.”

The lawyer said the inquiry had shown a “culture of plausible deniability rather than openness and candour” and this was prevalent across certain sections of the press. He added:

“Sir, I know you are at pains not to say this, but we do: the press is on trial here, and not simply in this room but also out there in the court of public opinion. After all, that is where the demand for this inquiry started, and [the press] know that. Of course they do. That is why they’re so scared of what evidence has been heard here, and most importantly, how it will be perceived outside. That is why they’ve employed the megaphone of the pages of their newspapers rather than the serried ranks of lawyers sitting here dutifully, day in, day out, when a particularly egregious examples of misconduct has meant that the best behaviour they’ve tried to present whilst under the microscope of this inquiry has slipped.”

Sherborne said very little of the stories heard in module one – examining the relationship between the press and the public – had not “involved even a hint” of public interest, listing the Dowler and McCann families, Chris Jefferies, the former landlord accused and later clear of the murder of Jo Yeates, and celebrities including actors Sienna Miller and Hugh Grant, as examples of individuals willing to give evidence to the inquiry, with no personal gain.

Anonymous Leveson witness HJK, targeted by press over a relationship with a celebrity, phone hacking victim Mary-Ellen Field, the family of murdered teenager Diane Watson were also mentioned by the lawyer in his closing submission. He referred to the treatment of singer Charlotte Church’s mother – Maria Church – by the News of the World. She was persuaded into giving the newspaper an exclusive story on her mental health issues. He added:

“The News of the World were well aware of her depression, well aware because they’d listened into her messages from her hospital visit when she tried to commit suicide…they not only published the graphic account of her husband’s infidelity, but in an act of the greatest compassion, blackmailed her into giving an interview, making her bare the arms which carried the marks of her self-harming with the promise that this would avoid a far worse follow-up story about her family.”

He said he was concerned it “might be payback time” for those who have to stood up against newspapers at the inquiry, and referred to the statement issued by Associated Newspapers last year, accusing Grant of making “mendacious smears” against the publisher. He said:

“Whatever else may be said about this episode, and there is much more I could say, what it does show is how the press, time and time again, goes on the attack, rubbishing those who run against the gauntlet as a way of instantly deflecting criticism away from itself. This culture of intimidation, where people become too afraid to speak out about the press, is not only unhealthy, but is surely as much a curtailment of free speech as anything with the press itself complains about.”

Jonathan Caplan QC, the lawyer acting for Associated Newspapers, said newspaper editors will challenge a new press regulator “at every opportunity” if they are excluded from decision-making. He said the group supported an industry plan for self-regulation proposed by Lord Black, chairman of the Press Standards Board of Finance, the body that funds the current Press Complaints Commission. He said:

“There is a real danger if editors are forbidden to participate in the new system they will seek simply to challenge it at every opportunity, which is clearly undesirable.”

The lawyer said the publisher also opposed the introduction of a statutory definition of the public interest, as decisions should be a “matter of judgment” best decided by the courts. He said:

“It is sadly inevitable that human errors will be made, and no regulatory system will ever change that… What matters is that a regulatory system should do what it can to prevent mistakes happening an in conjunction with the law provide access to meaningful forms of redress to those affected.”  My clients feel that we have heard too few speaking up for the popular press. Instead, the vacuum has been filled by people with axes to grind, prejudices to air, some ideological scores to settles, and some undoubtedly see this inquiry as an overdue opportunity to take the popular press and its content in hand.”

The inquiry then heard many of the abuses of press power heard at the Leveson Inquiry would not have happened without the industry dominance of News Corporation.

Guardian editor Alan Rusbridger – who stood up in court to deliver the closing submission of publisher Guardian News & Media Limited – said the Murdoch-owned News Corp “famously” used its influence to outbid and destroy competitors and told the inquiry there had been many documented allegations of law-breaking by the company.

He said he and Nick Davies – the Guardian reporter responsible for breaking the Milly Dowler phone hacking story – had come across many people who lived in fear of “one particular newspaper company”. He added:

“Many people in different walks of life believed it was a good thing to keep in with this company and a bad thing to fall out with it. It is now beyond doubt [that] was a reasonable belief.”

Rusbridger urged Lord Justice Leveson to include something on plurality and the effect on dominant media power in his final report. He later praised the inquiry for “shining a light in the dark places” and mirroring investigative journalism “at its best”.

He said the publisher would support the proposal of Lord Black – chairman of the Press Standards Board of Finance – for a new regulator but opposed serving editors sitting on the board, as they do in the current Press Complaints Commission.

Finally, Rhodri Davies QC, representing News International, said the future of a vibrant press relies on the tabloids, and the profit brought in by popular newspapers.  He said:

“That popular press must be allowed the scope to entertain and amuse as well as to educate and inform. It is as well to remember that the right to freedom of expression articulated by Article 10 is a right not only to impart information and ideas but also to receive them. When the public buy newspapers they are exercising their article 10 rights to receive information and ideas, and most of them choose to exercise those rights by buying the popular papers rather than the broadsheets.”

Davies said News International – parent company of the Sun and now defunct News of the World – recognised phone hacking at the News of the World was “profoundly wrong” but argued the paper had been largely successful during its run.  He said

“It is extremely difficult to balance the emotional impact of live evidence in this room against the dry intellectual knowledge that the majority of those 7,000 editions [of the News of the World] over 20 years never gave rise to any serious complaint but did inform and entertain millions of readers everyday.”

Davies responded to evidence suggesting senior officers at the Metropolitan Police had acted improperly over the decision to close the 2006 phone hacking investigation, saying it was due to an increased terrorist threat rather than collusion with News International staff. He said evidence given by Rupert Murdoch and others proved the proprietor had not entered into any deals with politicians for “personal or commercial benefits”.

News International have also denied any deal making with culture secretary Jeremy Hunt over the BSkyB bid. Davies said News Corp lobbyist Frederic Michel rejected claims made to the inquiry by Norman Lamb MP, who said Michel had threatened the Liberal Democrats with bad press coverage if business secretary Vince Cable – in charge of the bid until late 2010 – referred the bid to regulator Ofcom. Davies said:

“[Michel] make its quite clear that did not set out to make any threats to Mr Lamb, and if Mr Lamb thought he was being threatened, then that can only be a misunderstanding which has unfortunately festered until very recently. We would also point out that although Dr Cable did indeed refer to the bid to Ofcom, not too long after Mr Michel’s meeting with Mr Lamb, there is no suggestion that coverage by any News International titles of the Lib Dems then upon turned nasty.”

He added:

“Whatever the regulatory solution may be, lessons have been learned here. Such statements are often met with a lift of the eyebrows, but you heard yesterday from deputy assistant commissioner Akers of the cooperation given by the MSC to the Metropolitan Police of the instance where the MSC has carried out investigations which have not been asked for by the police and that the senior management and corporate approach now is to assist and come clean. Despite what [the victims’ barrister] Mr Sherborne said this morning, it is a culture of clean-up which is now in place. One may add to those consideration the sober reflection that the News of the World, a 168-year-old paper, has been felled. The electronic cupboards have been stripped bare. There have been a lot of arrests and a host of civil claims. These are lessons that are too severe to be forgotten and News International is determined not to have to learn them twice.”

Natalie Peck, is the web reporter for Hacked Off and a PhD researcher examining privacy law and public figures. She is @nataliepeck on Twitter