Government plans to regulate the press via a Royal Charter could damage the regional press industry, a daily editor has warned.

The draft provisions for the Charter, published this week in the wake of the Leveson inquiry into press standards, propose a ‘Recognition Panel’ whose role will be to validate a regulatory body to oversee the industry.

But Kevin Ward, editor of the South Wales Argus, has warned that the proposals – while having the benefit of avoiding statutory regulation – could damage local newspapers already struggling to make ends meet.

In particular, he has said the plan to include an arbitration arm to the new regulator left him with serious concerns.

“Some of the fine detail within the plans makes me deeply uneasy, as it should anyone who believes that a healthy regional newspaper industry is vital to local democracy,” he wrote in a blog post.

“The government’s proposals would allow third parties to complain about articles, opening the way to every minor pressure group making time-wasting and irrelevant complaints.

“There are also plans to create a low-cost libel arbitration arm to the new regulator, which could mean those publishers who do not use it would be left open to the threat of exemplary damages.

“That represents a double whammy for smaller local newspapers that do not benefit from the resources enjoyed by the nationals.”

Kevin added that there were still no estimates on how much the arbitration arm would cost in itself, and said he hoped the necessary tweaks would be made to the plans to protect local papers from “spurious” complaints.

“Let me make one thing clear. Newspapers like the Argus do not like getting things wrong. And when we do we want to put them right as soon as possible. I want readers to be able to complain about inaccuracies and the like, and we encourage them to do so,” he said.

“But, under these proposals, I can foresee a substantial increase in spurious complaints driven by people seeing pound signs before their eyes.

“Complaints will have to be investigated none the less, taking up time and money that many local newspapers can ill-afford.”

Under the plans, the Recognition Panel would be headed by a board appointed by a four-person Appointments Committee chaired by Lord Brown of Eaton-under-Heywood, a retired Supreme Court judge, and no editors, publishers, MPs or ministers would be allowed to be members of the Board.

The regulator would not have the power to prevent publication of material, but would be able to fine subscriber publications up to £1m found to be responsible for “serious or systemic breaches of the standards code.”

Meanwhile the National Union of Journalists has condemned the Royal Charter plan as a “sell-out”, accusing the government of back-tracking on promises made upon release of Leveson’s report.

Professor Chris Frost, chair of the NUJ’s Ethics Council, said he believed the new proposals had been drawn up by the Prime Minister to “appease his friends in big business”.

“David Cameron has completely ignored the key recommendations made by Leveson and, in doing so, has failed the victims of phone hacking, failed thousands of working journalists who are doing an important job incredibly well and deserve the support of a true regulator and failed the general public who deserve a press in which they can have some trust,” he said.