British Prime Minister David Cameron indicated he would reject a senior judge's recommendations for new laws to control the country's press despite the publication of a damning report.
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 later voiced concerns about any statutory change, putting him on a collision course with his junior coalition partners the Liberal Democrats, the Labour opposition and "betrayed" 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 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.
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.
"I have some serious concerns and misgivings on this recommendation," he said.
"We will have crossed the Rubicon of writing elements of press regulation into the law of the land... we should think very, very carefully before crossing this line."
Victims of phone-hacking and press harassment welcomed the inquiry's findings but slammed Cameron's response.
"I think he's gone back on his word and I feel betrayed," said Jane Winter, of British Irish Rights Watch, whose emails had been hacked into.
Ed Blum, a film director whose mobile phone was hacked by the News of the World, said Cameron had "ripped out the heart and soul" of Leveson's report and "let down the victims of press abuse."
Liberal Democrat Deputy Prime Minister Nick Clegg, taking the unusual step of making a separate statement after Cameron's, said that he backed Leveson's call for new legislation.
"Changing the law is the only way to give us all the assurance that the new regulator isn't just independent for a few months or years, but is independent for good," he said.
Opposition Labour leader Ed Miliband also said Leveson's proposals, which are now likely to go to a vote in the House of Commons, or lower chamber of parliament, should be implemented.
"No more last chance saloons," he said, referring to repeated warnings over the last two decades that the British press had had enough warnings.
Culture Secretary Maria Miller confirmed the parties had met to plan the next move.
"We have grave concerns and that's why tonight we've started cross-party talks," she told Channel 4 News. "I'm glad to say those talks went well."
Parliament will debate Leveson's recommendations on Monday.
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 offenders up to £1-million and to order the publication of apologies and corrections.
Those powers would be backed by new laws, he said. He summed up his plans as "independent regulation of the press organised by the press, with a statutory verification process".
Newspapers on Friday mostly praised Cameron's stance and warned against statutory curbs.
"He is right to warn of the risks of statutory intervention in newspapers. The government must take care not to suffocate the free press by trying to sanitise it," said the Financial Times.
"What is to stop MPs amending it now and in the future so that it no longer resembles the benign legislative vehicle envisaged by the judge?" asked the Daily Telegraph.
Over eight months of hearings, the Leveson Inquiry heard from victims of press intrusion including actor Hugh Grant and Harry Potter author JK Rowling, politicians, journalists, police and newspaper executives.
Police have arrested dozens of people under three linked probes into alleged crimes by newspapers.
Former News International boss Rebekah Brooks and Cameron's former spokesman Andy Coulson both appeared in court earlier on Thursday on bribery charges.