Prime Minister David Cameron has urged the newspaper industry to sign up to a new system of regulation, which he said would preserve freedom of the press while protecting the vulnerable.
The proposed new system was agreed in a cross-party deal at 2.30am on Monday morning, after late-night talks which averted almost certain defeat for the Prime Minister in the House of Commons.
Setting out plans for a royal charter to back a new, tougher press regulator with the power to impose big fines and prominent apologies on errant newspapers, Mr Cameron told MPs that the proposals delivered on the recommendations of last year's Leveson Report on press standards.
And the agreement was backed by the Hacked Off campaign, which said it believed the new system would produce a "genuinely independent" regulator to offer redress for press abuses.
However, there was a cautious response from elements of the press, with a joint statement signed by the Mail, Telegraph, News International and Northern and Shell, warning that there remained "several deeply contentious issues which have not yet been resolved with the industry" and making clear they would not make an immediate response.
Despite their agreement, the parties continued to squabble over the legal status of the new system. In an emergency debate in the Commons, Mr Cameron insisted the scheme did not "cross the Rubicon" of introducing a press law, which he said would open the door for future governments to suppress free speech.
But Labour leader Ed Miliband maintained there was "statutory underpinning" for the royal charter, while Liberal Democrat leader Nick Clegg described it as "a royal charter protected by legislation".
Mr Cameron made a number of concessions to secure the deal, dropping an effective veto for the industry over the new regulator's membership and agreeing that the regulator should have the power to "direct" newspapers on the prominence of apologies and corrections. But he told MPs that he had "unblocked the logjam" on Leveson by walking away from cross-party talks last Thursday and putting forward Conservative proposals for a vote.
Senior Tory sources suggested this move "flushed out" Labour, by forcing it to publish its own preferred version of the charter and end the "sabotage" of Government legislation by inserting clauses in them to implement Leveson. But Labour dismissed this version of events as "ludicrous", pointing out that the royal charter agreed in the early hours of this morning differed in only nine minor details from the draft put forward by Labour and Lib Dems on Friday.
The amendment to the Crime and Courts Bill enabling the courts to impose exemplary damages was later passed in the Commons by 530 votes to 13.