The National Union  of Journalists has welcomed the proposed cross-party deal on press regulation hammered out in the early hours of today – but free speech campaigners said they were “dismayed” at the outcome.

The Tories, Labour and the Lib Dems agreed to set up a Royal Charter to oversee the press, but crucially, it will not be specifically referred to in any new legislation.

Instead, a general reference to protecting Royal Charters in law will be included in a bill currently going through the House of Lords.

The government has also accepted that that the newspaper industry should not have a veto over membership of the regulator.

NUJ general secretary Michelle Stanistreet said:  “There are elements in the new framework which can be welcomed– the NUJ has long campaigned for a regulator that is genuinely independent of the industry and the state, one that has teeth and powers of investigation.

“The editors pushed hard to have a veto over membership of the regulator, and it is good news that their intensive lobbying to keep power in their own hands has been seen off.

“The NUJ believes that co-regulation is vital. We welcomes recognition of the principle that working journalists and members of the public should be involved in the drawing up of the standards code.

“The great failure of the PCC, as recognised by Leveson, was that it represented the interests of only the editors and proprietors and operated like an old boys’ club. Journalists below the rank of editor had no input and there was no real attempt at public engagement.

“Now we need agreement from the new regulator to introduce a conscience clause for journalists, as part of the code, to protect them from being forced to act unethically – this was supported Lord Leveson in his recommendations.

“The cross-party charter marks an important improvement on Cameron’s plans, by allowing third party complaints to the regulator, subject to discretion to reject vexatious complainants. The failure by the PCC to take up third party complaints has meant that some of the most vulnerable, such as asylum seekers, have been subject to unchecked vilification by parts of the press.

“The NUJ hopes the industry can build on the political consensus and focus on ensuring the new framework is effective. The editors of the Guardian, the Independent and the Financial Times have all conceded that some sort of statutory underpinning, to ensure the independence of the new body and the powers it will need to be effective, would not cause the sky to fall in nor John Milton to spin in his grave.

“The whole process following the publication of the Leveson report has been unedifying. Meetings with the industry and government have taken part behind closed doors, despite Lord Leveson saying that transparency was important. All along, parts of the industry have been doing all they can to resist change and the challenge to the status quo which has allowed them for so long to mark their own homework.

“Above all, we should not forget why we are where we are. Elements of the press became too powerful, believed they were above the law and could make politicians cower by threats to turn them over personally and to discredit their party’s policies. The real issue that needs to be addressed is the ownership structure that has placed huge swathes of our media in the hands of individuals and corporations whose interests are dominated by their commercial interests, not by those of press freedom or quality journalism.

“This cross-party agreement enables the development of new structures and a new code  and is therefore welcome. For journalists and for the wider public there are many other issues regarding media ownership and control which also need to be addressed.”

However free speech campaigners said the deal for a new press regulator will tarnish British democracy.

Index on Censorship chief executive Kirsty Hughes said the decision was a “sad day for press freedom in the UK”.

She said: “Index is against the introduction of a royal charter that determines the details of establishing a press regulator in the UK – the involvement of politicians undermines the fundamental principle that the press holds politicians to account.

“Politicians have now stepped in as ringmaster and our democracy is tarnished as a result.”

She added: “Requiring a two thirds majority from both Houses for future changes in the royal charter introduces political involvement for all time into press regulation in the UK.

“It is a bleak moment for the UK’s international reputation as a country where press freedom is cherished as a fundamental principle and right.

“The fact that this requirement is now being applied to all royal charters is a rushed and fudged attempt to pretend this is not just a press law.

“It resembles precisely the kind of political manoeuvring we see in Hungary today – where the government is amending its own constitution through a parliamentary vote undermining key principles of their democracy.”

Index on Censorship chair Jonathan Dimbleby added:  “As Chair of Index on Censorship, I have to report that the Index board of trustees – who all occupy senior positions in roles both within and outside of the media – is dismayed at the course of developments that have been taken in establishing a new press regulator.

“The board has the gravest anxiety at the residual political powers the now expected outcome and system will give to politicians.

“The two thirds block on any changes to the royal charter could be abused in the future – not least when today’s emerging consensus shows that the parties can come together in both houses to agree on press regulation.”