• Ex-PCC director defends not questioning editors on hacking

• Admits PCC is not a regulator; it is a 'complaints handler'

• Denies PCC was dominated by Dacre, Hinton and Meyer

Leveson inquiry: PCC director Stephen Abell is giving evidence

4.58pm: Abell has now completed his evidence, but Leveson says he may recall him to try out his ideas when they are more fully formed.

4.53pm: Leveson asks Abell about evidence submitted by groups last week that complained that they could not submit complaints to the PCC as they were not individuals.

Abell says it is the duty of the PCC to work with interest groups. He says that groups such as mental health charities or science bodies are welcome to complain about general issues of fact.

4.52pm: Jay asks whether this is another "last chance saloon".

Abell says the newspaper industry should be wary of throwing its hands up about statutory regulation. He adds that any new body should have "more force" than it presently does.

4.48pm: Abell suggests a contractual framework with a possible "statutory mention" as a new mechanism for requiring all publishers to join the new-look regulator.

He wants a "kitemarking" system so that online outlets that perform a newspaper-like function and which wish to associate themselves with the regulator should be able to join.

4.43pm: Abell says that an ability to impose fines could be introduced, but not for quick-turnaround complaints.

"Once you make that mental leap into two prongs, to me that ability to impose fines becomes a much more attractive option," he says.

4.40pm: Abell tells the inquiry it is "not practicable" to compel newspapers, magazines and "newspaper-like websites" to be regulated under the same body.

Lord Justice Leveson says that the "desirability" of it is "another matter".

4.38pm: The risk of legislation is that it can lead to amendments being made and the spectre of parliament becoming involved in the structure of regulation, Abell says.

He adds that Richard Desmond's concern about the PCC were over "collegiality", not so much falling out with Paul Dacre.

"His objections were less to the PCC but to the overall system," he says.

4.33pm: At the heart of the newspaper industry is people exercising their right to be "polemic" or publish certain stories with prominence, Abell says.

4.30pm: Abell says he is "happy that the term 'regulator' not be used to describe the PCC".

4.26pm: Abell is asked about "the Desmond problem" – as Jay says it has been described to the inquiry – of getting all the media groups to sign up to the PCC.

Jay reads a note from Abell that described Richard Desmond's decision to withdraw Northern & Shell newspapers and magazines from the PCC as causing the commission "practical, philosophical and procedural problems".

4.22pm: The Hacked Off campaign group has just tweeted:

Abell's statement says three of the PCC-like bodies in Europe - Denmark, Luxembourg and Lithuania - have basis in legislation. #Leveson

4.20pm: Jay asks whether there is or was a "special relationship" between News International and the PCC that made the watchdog "pull its punches".

Abell says there is not. The PCC usually deals with News International managing editors, and the company's response to the phone-hacking scandal came from "more corporate figures", he says.

4.19pm: The ability to impose financial sanctions on newspapers would focus the mind, Abell says.

4.16pm: Jay says that either the PCC did have the power to investigate and should have investigated; or did not have the power and should have.

Abell says the PCC does not have power to investigate a "systemic" issue, such as phone hacking.

He suggests that the PCC should not have reached a qualitative finding based on what it had been told in 2009. The (more powerful) Commons culture, media and sport select committee did not reach a wildly different conclusion from the PCC in its report, but was more sceptical of the evidence it had received, Abell says.

4.07pm: Jay asks Abell about a 2010 letter from Alan Rusbridger detailing the Guardian editor's concerns over the PCC's report on phone hacking and highlighting issues raised by New York Times reports.

"It did cause me disquiet and I reflected that disquiet to the commission," Abell says.

Abell then wrote to Rusbridger stating:

In November 2009, the commission came to a view – based on information available at the time – as to whether it had been misled by the News of the World. Further information has, of course, since appeared.

The commission's position on this, together with other aspects of the case, will be assessed when we return to the matter at the conclusions of the enquiries, which are currently being undertaken, and following the end of any legal proceedings which are brought.

Abell described the situation as "perilous" in an internal memo to the commissioners following Rusbridger's letter, Jay says.

4.01pm: Jay asks Abell whether there is dislike for Max Mosley within the PCC.

"Not at all," says Abell, adding that he has a personal sympathy with Mosley over the the News of the World sting.

3.55pm: Lord Justice Leveson says that complainants often need a "very large magnifying glass" to see rulings published in their favour.

He asks whether the PCC would be in favour of newspapers paying a fee to publish apologies in rival titles, as suggested recently by Evgeny Lebdev, proprietor of the Independent and London Evening Standard.

Abell says if the majority of the industry agreed then it could be done.

3.52pm: The PCC cannot direct where corrections should be published by newspapers, but an amendment to the code states that the editor and the commission must agree on the final placement.

Abell admits this "sets a limit on the power of sanction" of the PCC.

He suggests that there should now be a way of "increasing the power of the critical sanction".

3.42pm: The inquiry is now taking a short break.

 Jan Moir and Stephen Gately. Photographs: Daily Telegraph/PA

3.38pm: Abell is asked about Jan Moir's column in the Daily Mail about the death of singer Stephen Gately, which was original headed "Why there was nothing 'natural' about Stephen Gately's death" (later amended to the print edition headline "A strange, lonely and troubling death").

Moir was accused of homophobia over the piece.

Abell says the PCC was the subject of "Frybombing", after Stephen Fry directed his millions of Twitter followers to the PCC website to complain about the Moir article. There were 22,000 complaints and the PCC website crashed.

Abell says the article was "just short" of a breach of the PCC code. He adds that it was a "difficult" point to rule on, but the commission came to its judgment.

 Clare Balding: complaint upheld by the PCC

3.36pm: Abell is asked about Clare Balding's 2010 complaint to the PCC over being described as a "dyke on a bike" in the Sunday Times.

He says that the article should be read in context and that communities can "reclaim" a once-offensive word.

However,he adds that he does not agree with the verdict of John Witherow, editor of the Sunday Times, given earlier this month to the inquiry that use of the word was not offensive.

He stands by the original PCC ruling that the words were used in a "demeaning and gratuitous way".

3.27pm: Abell says that the PCC will mediate payments from newspapers to complainants if the situation arises.

The commission does not have power to force newspapers to settle a complaint financially.

3.23pm: A full complaints file, featuring all of the evidence behind a complaint, will be given the each PCC commissioner and a recommendation proposed.

Commissioners will not vote but a majority verdict will be sought, Abell says.

3.20pm: The complaints handler should be 60/40 in favour of the complainant, Abell says.

He adds that the complaints handler should "grip" the issues and bring them to a conclusion by assisting the complainant.

3.17pm: The PCC's annual report for 2010 records more than 7,000 complaints and 1,687 rulings.

Abell points out that some complainants will "dash off a quick email" and will not follow it up.

3.10pm: Abell says he would not be "dogmatic against" having ex-editors on the commission, but adds that they may not be in step with current cultures that are evolving.

Abell says that the PCC is "primarily a complaints-handling body" and is not a regulator, as set out in its articles of association. However, he says it has "regulatory aspects".

The PCC has evolved into a quasi-regulator but without a "concomitant structure to allow it to do so," Abell tells the inquiry.

3.05pm: "To join the PCC, you would have to have a strong personality," says Abell, pointing out that the commission is made up of a former judge, a former chief constable and a professor of media law.

He says there will always be a risk that the PCC does not appear independent because of its links with serving editors.

3.02pm: Abell tells the inquiry he cannot recall a time when the commission called for a change to the code of practice and the editors refused. He suggests this would cause a "political difficulty".

2.49pm: Before 2002, the PCC chair was appointed entirely on Pressbof's discretion, Abell says; now it is discussed with lay members and an independent assessor.

2.46pm: Abell is asked about the relationship between the PCC and the Press Standards Board of Finance (Pressbof). Pressbof funds the PCC and is itself funded by a levy calculated according to the size of the publication so that for, example, news International would pay more than a local paper.

2.43pm: The PCC operates a "desist line" for members of the public or celebrities who do not want to speak to the press.

If editors ignore a desist notice, they will be in breach of the PCC code.

The desist line also works for paparazzi photographs, Abell says.

2.35pm: Abell has submitted 408 pages of formal written evidence to the inquiry. Leveson thanks him for his "monumental" effort.

2.32pm: Toulmin has now finished giving evidence and the current PCC director, Stephen 'Stig' Abell, has taken the stand.

2.32pm: Toulmin is asked about coverage of Madeleine McCann's disappearance in 2008.

He says that the PCC were in contact with the McCanns "but the system does require a complaint … and I don't think there was a complaint about those defamatory articles".

Toulmin says that Sir Christopher Meyer will shed more light on the McCann coverage when he gives evidence tomorrow.

2.30pm: Toulmin says that the landscape around the PCC has changed. "It was set up before the Human Rights Act and the internet," he says.

2.28pm: Toulmin is asked about the future of press regulation.

He says it is important not to lose the "excellent" complaints-handling service that the PCC conducts.

"In terms of the phone-hacking lessons, I think the PCC would maintain it never tried to get to the bototm of the issue because it couldn't," he says.

Toulmin describes as a "major problem" the issue of opt-in membership.

"It might just be the time to come up with a simple piece of legislation that the industry should come together and provide an ombudsman service for the public," he says.

2.22pm: Leveson points out that if the PCC had said straight away it was not a regulator, the industry could have got together and done something about phone hacking.

Instead, all the industry did was say, "Well, there is a wonderul self-regulatory system."

2.20pm: Toulmin says he was not involved in the PCC board decision to conclude in 2009 that there was "no new evidence" of phone hacking beyond Goodman and Mulcaire, and that the Guardian's revelations "did not quite live up to the dramatic billing they were initially given".

"It was a major mistake. So far as I had any influence in hindsight I would have tried to take it out," he says.

"The board of the commission … these were people approaching this matter in good faith and trying to do something of use … There was nothing in it for the members of the commission and the lay members to deliberately land the PCC with this major problem of falsely suggesting that the Guardian story was not as important as it seemed," he adds.

2.17pm: Toulmin says the PCC was wrong to dismiss the Guardian's phone hacking revelations in its 2009 report:

I think what I'd say is that this is what the commission wanted to say at the time. I was responsible for capturing that. It was obviously wrong. The decision to make a qualitative judgment on the evidence dismissing the Guardian's evidence was a major mistake, there's no doubt about that. It's a great regret that happened.

2.14pm: Toulmin is asked about the PCC's now-withdrawn 2009 report into phone hacking.

He says this was "unprecedented" and he felt "uncomfortable" writing the report. Toulmin stresses that he physically typed the words of the report, but they were the views of the commission. He said the board discussed the report twice.

2.11pm: After the Guardian's revelations in July 2009 about phone hacking, Toulmin asked News of the World editor Colin Myler about who at News International dealt with Glenn Mulcaire. This was after the judge in Mulcaire's trial said that the private investigator dealt with "others" at the newspaper group.

Myler wrote back in no uncertain terms. He told Toulmin that the Guardian's allegations were "not just unsubstantiated and irresponsible, they were wholly false".

Toulmin agrees that Myler stuck "very strongly" to the one rogue reporter line.

2.07pm: the inquiry has resumed and Tim Toulmin, former director of the PCC, is completing his evidence.

2.03pm: Toulmin suggests in his written statement that the PCC should "never have become involved" in an inquiry into phone hacking. He says that conducting the "limited exercise" it did meant that some people began to wrongly regard the PCC as a regulator.

He states:

In relation to phone hacking, the Commission began to be judged at some point, and in some quarters, as a 'regulator' that had failed to get to the bottom of the scandal. This was despite efforts – such as in public statements and appearances before the CMS Select Committee – to explain what the PCC was trying to achieve given the limitations of its powers, and to draw attention to the division of responsibilities between the PCC and other authorities.

Perhaps, then, the PCC should never have become involved: it was not obliged to do so since it never received a complaint about the matter. Conducting the limited exercise that it did undertake seems to have confused people about its role. But there was a view at the time that the PCC was in a position to do something of value to raise awareness about the unacceptability of phone hacking, and suggest ways it could be avoided in future.

2.01pm: Tim Toulmin's witness statement has been published on the inquiry website.

Here is an extract from the statement in which Toulmin explains what steps the PCC took in relation to phone hacking in 2006:

Following the convictions of Clive Goodman and Glenn Mulcaire, the PCC could not institute an inquiry into other possible instances of phone message hacking at the News of the World, or more generally in the press, since it had neither the legal powers nor the authority vested in it by the newspaper industry to do so. Even so, it wanted to do something useful to complement the police inquiry so that light could be shone on what went wrong at the newspaper, and so that lessons could be learned generallyfor the industry to ensure that there was no repetition.

The result of this activity was a report published in May 2007 – which can be found here which contained a number of recommendations for the industry as a whole. It is clear from this document that the PCC did not attempt an inquiry into possible further instances of phone message hacking at the newspaper, which would have been impossible and seen the Commission acting ultra vires. Instead, it required an explanation from the newspaper about how the Goodman/Mulcaire situation arose and what steps had been taken to ensure it could not be repeated. But the main focus when the report was published was in fact on the publication of new guidelines for the industry as a whole on subterfuge and newsgathering. It was therefore predominantly a forward-looking exercise.

Following a suggestion in July 2009 by the Guardian newspaper that the PCC may have been misled by the News of the World during the course of its previous inquiries, the Commission looked again at the matter. Again, this did not constitute an 'inquiry' into phone message hacking. It concluded, in November 2009, that it had not been materially misled by the paper. This finding was set aside by the PCC in 2011 in light of further revelations.

1.09pm: Here is a lunchtime summary of today's evidence so far:

• The former PCC director, Tim Toulmin, has defended its decision not to question editors following phone-hacking convictions in 2006.

• Toulmin admitted the PCC cannot be described as a regulator and says it is a "complaints handler".

• Toulmin denied the PCC was dominated by "tripartite" of Paul Dacre, Les Hinton and Sir Christopher Meyer in the late noughties.

1.02pm: The inquiry has now broken for lunch.

12.59pm: The News of the World editor, Colin Myler, told Toulmin in his reply that phone hacking at the paper was the work of "one rogue reporter".

Jay tells the inquiry that Toulmin ruled out questioning Andy Coulson because the PCC could not be seen to be overlapping a criminal investigation.

12.58pm: Jay asks Toulmin about an internal PCC report written by Toulmin on 4 December 2006 about phone hacking. This was after Goodman and Mulcaire had pleaded guilty to illegally voicemail interceptions, but before they had been convicted.

In the letter, as read by Jay, Toulmin posits the idea of putting questions to the News of the World editor at the time, Andy Coulson, and his successor, Colin Myler.

Jay says Toulmin gave the impression that the PCC was launching an investigation.

Toulmin describes it as an "exercise" into the "subcontracting" of unlawful newsgathering methods by the News of the World to Mulcaire.

12.51pm: Jay points out that in May 2007 the PCC issued new guidelines on subterfuge and newsgathering. It covered the use of third parties such as private investigators and search agents.

12.50pm: Toulmin is pressed on the PCC response to Operation Motorman.

"I think we tried to support Richard Thomas. It was his campaign. The Data Protection Act was his responsibility," Toulmin says.

He adds that the PCC agreed with the information commissioner's aims to ensure that journalists behaved lawfully

12.48pm: Financial Times media correspondent Ben Fenton has just tweeted:

[If PCC isn't a regulator, ergo the press isn't regulated at all. ergo if it is to be regulated, it can't be by current system] #leveson

12.45pm: Lord Justice Leveson asks if the mistake everyone made was believing it was a regulator when it's not actually a reulator at all. Toulmin agrees.

12.41pm: Everyone agreed that the Data Protection Act should not be breached by journalists, Toulmin tells the inquiry, adding that the disagreement was over whose responsibility it was to handle the Motorman fallout.

Toulmin says that Thomas went to the wrong body when he took the Motorman report to the PCC.

"He either should have gone directly to the industry – trade bodies – or the code committee, which is more representative of the industry," he says.

12.39pm: Jay moves on to the PCC's response to the ICO's 2006 reports What Price Privacy? and What Price Privacy Now? into the unlawful trading of confidential information by newspapers.