Let us look first at the nightmares that have not become real. - The Guardian

Let us look first at the nightmares that have not become real.

The government is not being invited to take over the press. All those full-page advertisements linking Lord Justice Leveson to Robert Mugabe and Bashar Assad, all that high-octane coverage in the Sun and the Mail about his report "imposing a government leash on papers" and threatening "state regulation of Britain's free press" has proved to be no more than froth on the lips of propagandists, simply another round of the same old distortion that did so much to create this inquiry in the first place.

Nor does the Leveson report accept that Fleet Street should be rewarded for its repeated abuse of power with the grant of even more power, not only to run its own regulator but to investigate journalists and to impose fines on those it might find wanting. This was the cutting edge of the plan hatched by the conservative end of Fleet Street, still blandly, blindly confident that the rest of us would accept placemen for the Express proprietor Richard Desmond ("Ethical? I don't quite know what the word means") policing the ethics of the press; or Paul Dacre (who originally told the Press Complaints Commission that the Guardian's coverage of the phone-hacking scandal was "highly exaggerated and imaginative") having some role in fining the Guardian; or executives from Rupert Murdoch's News International, which misled the press, public and parliament, being granted any kind of role in investigating the truth of other newspapers' stories. Leveson rejected this plan with a neat soundbite: "It's still the industry marking its own homework."

Nor is this any kind of catastrophe for British journalism. From a reporter's point of view, there is no obvious problem with the core of Leveson's report, his system of "independent self-regulation".

This would have three functions. First, it would handle complaints, but it would do so through an organisation that was neither appointed by nor answerable to Fleet Street. The dark end of the industry may complain that this is all a terrible threat to the free press, echoing the rapist who claims the police are a threat to free love. Why should we fear an independent referee? Why should we not be ashamed of the old Press Complaints Commission which, as the report puts it, "has failed … is not actually a regulator at all … lacks independence … has proved itself to be aligned with the interests of the press"? It is hard to think of any other decent answer to the evidence of Kate and Gerry McCann, falsely accused of murdering their own child; or of Christopher Jefferies, viciously smeared as a killer; or of any of the other witnesses in the opening module of Leveson's inquiry.

Second, the new regulator would investigate systemic offending. That looks weaker. This is not about investigating crime. There is not (nor should there be) any suggestion that the regulator would have any power to compel the disclosure of documents or to search a reporter's desk. This is about investigating systemic breaches of the code of conduct – taking pictures in breach of their subject's privacy, for example, or interviewing children without the consent of their parents. Without police powers, the regulator would rely on journalists to co-operate. History suggests they will be reluctant to do so for fear of losing their career. Numerous former News of the World journalists helped the Guardian to uncover the hacking scandal, but only two of them felt able to speak on the record. Weak, but not a threat.

Finally, and most importantly, the regulator would run a new arbitration system as a cheaper and quicker alternative to the civil courts.

That looks like very good news for reporters who currently work with laws on defamation, privacy and confidentiality that really do inhibit the freedom of the press, threatening damages and legal costs on such a scale as to encourage the suppression of the truth. The likes of Jimmy Savile do well in those conditions. Leveson's arbitration system would lighten the load. And, in addition, it offers an incentive for news organisations to volunteer to join a new regulator: their membership, Leveson suggests, would exempt them from the worst of the costs and damages they might face in the event that they do end up being sued in the civil courts. Leveson needs a new law to ensure that the courts recognise the new regulator and deliver those benefits to its members.

There is a nightmare here, but it is for the old guard of Fleet Street. To lose control of the regulator is to lose their licence to do exactly as they please.

While the political attention may focus on Leveson's plans for the future, the real power of his report is in the detailed, damning evidence of just what that licence has allowed. "Parts of the press have acted as if its own code simply did not exist … there has been a recklessness in prioritising sensational stories, almost irrespective of the harm that the stories may cause … a willingness to deploy covert surveillance against or in spite of the public interest … significant and reckless disregard for accuracy … some newspapers resorting to high volume, extremely personal attacks on those who challenge them."

The report takes on the Daily Mail and its editor, Paul Dacre, for accusing Hugh Grant of "mendacious smears" in giving his evidence to the inquiry, finding that the paper "went too far" and that Dacre "acted precipitately" and that his explanation for his actions "does not justify the aggressive line which was adopted". It tackles the Sun over its decision to expose the fact that Gordon Brown's infant son had been diagnosed with cystic fibrosis, finds that "there was no public interest in the story sufficient to justify publication without the consent of Mr and Mrs Brown", recognises the possibility that the information may have been obtained "by unlawful or unethical means" and challenges claims by the then editor Rebekah Brooks that the Browns were "absolutely committed to making this public". It details the behaviour of the Mail, Sun and Telegraph who, while Leveson was sitting, opted to publish material about the death in a coach crash in Switzerland of the 12-year-old schoolboy Sebastian Bowles, which "undeniably raises issues under the editors' code".

This does not mean that the report presents no problems for journalism generally.

In the small print, it seems to suggest that police officers should no longer be able to give non-attributable briefings to reporters. If that rule had been in place over the last few years, it is fair to say that the Guardian might not have been able to expose the hacking scandal. There is a section which implies that reporters should be able to conceal the identities of confidential sources only if they have some kind of proof of the undertaking, such as a written agreement with the source – hardly possible if your source is a professional criminal describing alleged police corruption, or a child prostitute talking about her pimp.

But the real problem, of course, is in the power of the beast. This debate is not about to be settled with facts and reasoned argument. It will be conducted under the same old rules – of falsehood, distortion and bullying. Will any government stand up to it? That's where the real nightmare may lie.