Cash flow to the Newspaper Society plunged by more than £1million in the past year after it cut its subscriptions to publishers, according to latest figures.

The Society’s latest statement of accounts reveals that its total income in 2012 fell to just under £2.4m, down from almost £3.5m in 2011.

According to treasurer Paul Hunter, income fell in 2012 due to the Society dropping its subscription fees., while the 2011 figures were also inflated slightly due to a £250,000 donation from Sir Ray Tindle to sponsor the Local Business Accelerators initiative.

Mr Hunter also revealed that despite making a £149,327 pre-tax surplus last year, this has been more than swallowed by the £214,000 annual payments the society needs to make to meet the “substantial deficit” in its pension scheme.

NS director David Newell acknowledged the year had been tough for the whole industry – but highlighted the work of the society in fighting for the interests of the local press.

And in a piece accompanying the statement of accounts, NS president Adrian Jeakings praised the “extraordinary standards of journalistic excellence” across the industry.

“We account for 24pc of the total spent on news in this country – that’s more than is spent by TV, radio, or indeed by any other medium apart from the national press. We are an essential part of the UK news ecology,” he wrote.

“Regional and local newspapers are at the heart of communities up and down the country and play a unique role in all of them.

“We should be proud of the extraordinary standards of journalistic excellence across our industry and the commitment our teams make to uncovering wrongdoing and holding those in authority to account as well as covering the pleasanter side of local life.

“It is a critical role which no-one but the local press can fulfill.”

He also used the piece to highlight how the regional press – read by 31million people a week in print – is suffering from the negative impact of the Leveson inquiry, and called on the government to make key changes to support the industry.

These include:

* Stopping BBC competition with commercial rivals and ensuring the corporation offers access to content for local media sites

* Using the local press’ high levels of trust and community engagement for more government advertising campaigns

* Retaining all statutory public notices in local newspapers

* Shutting down competing council newspapers

* Protecting the principles of freedom of the press, open justice and open government.