A major inquiry called Thursday for new laws to underpin a tougher watchdog for Britain's "outrageous" newspapers in a move that threatens to split Prime Minister David Cameron's coalition government.
Senior judge Brian Leveson, who led the eight-month inquiry following the phone-hacking scandal that closed down Rupert Murdoch's News of the World, also criticised politicians for getting too close to the press.
His eagerly awaited report called for an independent self-regulatory body backed by legislation, saying that decades of misbehaviour by the British press had undermined its own argument that it works in the public interest.
Lord Justice Leveson said in a statement that the British newspaper industry had "wreaked havoc with the lives of innocent people" and "acted as if its own code, which it wrote, simply did not exist."
He said behaviour of the press "at times, can only be described as outrageous."
Victims of phone hacking and press harassment broadly welcomed his findings.
Cameron personally set up the Leveson Inquiry and will come under pressure to implement its recommendations, despite previously appearing cool on new legislation.
He was due to make a statement to parliament on the report's conclusions at 1500 GMT.
But the report divided the coalition government before it was even unveiled, with Liberal Democrat Deputy Prime Minister Nick Clegg taking the unusual step of demanding to make a separate statement after Cameron.
The British press, already suffering huge losses of readers and advertisers, currently regulates itself through the Press Complaints Commission, a body staffed by editors. Its critics say it is toothless.
Leveson said in his report that a new watchdog would have independent members, except for one editor. It would have the power to fine up to £1 million ($1.6 million, 1.23 million euros) and to order the publication of apologies and corrections.
Those powers would be backed by new laws, he said, summing up his plans as "independent regulation of the press organised by the press, with a statutory verification process".
The judge suggested that the British broadcasting regulator, Ofcom, could be used as a "backstop" for newspapers that refused to join in the scheme.
Leveson added that it was now up to lawmakers to decide what to do with his recommendations, saying: "The ball moves back into the politicians' court. They must now decide who guards the guardians."
Hacked Off, a victims' campaign group featuring Hollywood star Hugh Grant, said the inquiry's proposals were "reasonable and proportionate".
Former Formula One supremo Max Mosley, who successfully sued the News Of The World for privacy damages, welcomed Leveson's proposals and said it would be "astonishing" if politicians failed to follow them.
The prime minister set up the Leveson Inquiry in July 2011 in the wake of revelations that the News of the World had hacked the voicemails of murdered schoolgirl Milly Dowler as well as dozens of public figures.
Murdoch was forced to shut down the 168-year-old newspaper over the scandal.
Over eight months of hearings, the Leveson Inquiry heard from victims of press intrusion including actors and celebrities, as well as politicians, journalists, police and newspaper executives.
Their testimony revealed embarrassing text messages from Cameron to newspaper executive Rebekah Brooks, left a minister fighting for his career, and shone a light on the often cosy relationship between the press, police and politicians.
Leveson said that the "relationship between politics and the press has been too close" and that contacts between them should be recorded, with similar measures for meetings between journalists and police.
Parliament will debate Leveson's recommendations next Monday, probably followed by a non-binding vote.
Police have launched three probes into alleged crimes by newspapers. Brooks, the former head of Murdoch's British newspaper wing News International, and Cameron's former spokesman Andy Coulson have been charged with phone hacking and bribery.
Both Coulson and Brooks, who are former Murdoch editors, appeared in court Thursday on bribery charges, just hours ahead of the report's publication.