Industry leaders have called on ministers to scrap their plans for a press regulator underpinned by Royal Charter saying they would place an “exceptionally large financial burden on local newspapers.”

Not a single national or regional newspaper publisher has signed up to the Charter plan since it was unveiled following a cross-party deal last month.

Now the Newspaper Society, the body which represents the regional press industry, has called on minsters to drop it, calling it an “unacceptably high price to pay for a problem they did not create.”

Its director David Newell set out its objections in a letter to deputy prime minister Nick Clegg, in his capacity as Lord President of the Privy Council.

David wrote in reply to a previous letter from Mr Clegg suggesting that regional newspapers could be allowed to join the new regulator on “different terms” from the nationals.

The NS boss said this would not enable local and regional newspapers to escape the “additional burdens” which the new system of regulation would lead to.

Wrote David:  “I do not believe that the provision in the draft Royal Charter to which you refer – making membership of an approved regulator ‘potentially available on different terms for different types of publisher’ – would provide the protection you suggest for the regional and local newspaper industry.

“You are asking them to pay an unacceptably high price for a problem they did not create.

“Any approved regulator under the Charter would be required to comply with the 23 recognition criteria agreed by the three party leaders in consultation with Hacked Off, including an arbitration service which would be free to complainants and would inevitably open the floodgates to compensation claims and increased legal costs.

“Many of the claims which are currently resolved easily and without cost to either side would be converted into claims for money. This would place an exceptionally large financial burden on regional and local newspapers.

“In terms of the costs of the new regulator, it is hard to see how these could be more fairly shared between the different sectors except broadly on the basis of the proportion of the regulator’s time spent on complaints for each sector as at present.

“Currently it is estimated around 40 per cent of the PCC’s time is spent on regional press complaints, largely because of the size of our sector.

“None of the options available to regional and local publishers would allow them to avoid the additional burdens which everyone, including Lord Justice Leveson, has agreed should not fall on this part of the industry.”

“If the local press were to set up its own regulator, it would have to carry on its own all the costs of setting up and maintaining the scheme, complying with all the recognition criteria including running a ‘free arbitration’ service. This would be considerably more expensive than being part of a single regulator.”

“Even if a local newspaper publisher joined an approved regulator, with all the additional costs involved, there would be no guaranteed protection from the onerous exemplary damages and costs provisions laid down in the Crime and Courts Bill.

“Quite apart from the increased costs and regulatory burden placed on the regional press, this new system cannot be described as voluntary self regulation. The principle that a free press should not be subject to statutory underpinning would have been crossed.

“The industry would ask that the controversial draft proposals which cause so much concern to regional and local newspapers are not presented to the Queen before appropriate discussions and consultations take place.

“It is my understanding that you have a key role in this process as Lord President of the Privy Council.”