Peter Barron, editor of The Northern Echo, expressed astonishment at the decision by the Metropolitan Police not to mount a further investigation into the claims, published in The Guardian.

Writing on his blog, he said: "These are seriously damaging allegations against News Group in particular and the profession of journalism in general.

"We need to get to the truth. And if the police don't see the need to pursue it, then Parliament must.

"Rupert Murdoch is not known for wasting his money and, even for a man of his means, £1m is not a trifling sum.

"If he is willing to flash the cash to avoid further court examinations of methods used by his journalists, something has to be wrong."

Another blogging regional editor, Keith Perch of the Leicester Mercury, also admitted that The Guardian's allegations "don't help" when instilling public trust in journalists.

But he added: "I only really want to say one thing about the Nick Davies article and that is this: no journalist at the Leicester Mercury uses illegal methods to find stories."

Mr Davies claims News of the World journalists hacked into the mobile phone messages of thousands of public figures.

In 2007, News of the World journalist Clive Goodman and private investigator Glen Mulcaire were jailed for phone tapping.

News International said in a statement: "Since February 2007, News International has continued to work with its journalists and its industry partners to ensure that its journalists fully comply with both the relevant legislation and the rigorous requirements of the PCC's Code of Conduct.

"At the same time, we will not shirk from vigorously defending our right and proper role to expose wrongdoing in the public interest."

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