Former Home Secretary Alan Johnson rejected plans for a full investigation into phone hacking, the Leveson Inquiry has heard.

Sir Denis O’Connor, the chief inspector of constabulary, said he discussed the case with Johnson, then Home Secretary, and senior official in 2009 but there was little enthusiasm for carrying it forward.

He told the inquiry: “A discussion ensued with a minister and the Home Secretary at the time but there was not appetite for HMIC being involved. It never got off the ground, sadly."

O’Connor said the official had asked him for his view after a Guardian article, published in July 2009, alleged further wrongdoing and felt it demanded an investigation.

He added: “I said, looking at this, I thought the revelations merited some sort of independent review. I thought if the allegations if true in any degree would raise substantial public confidence issues.”

At the time, Her Majesty’s Inspectorate of Constabulary, headed by O’Connor, was investigating allegations that Conservative minister Damian Green was being leaked confidential Home Office documents by a junior civil servant.

O’Connor was asked about an HMIC review of police relationships, published last year. He said interactions between police officers and journalists should be regulated by without stifling contact, which would “defy reality”.

He said: “Those in regulation we didn't manage to stop this... I take the view there needs to be a significant revision in the way it works, but not to shrink the relationship but to get it on the right footing... It's much more creating the framework where everybody can understand the appropriate moral compass.”

He later added: “We have to think about ways of not freezing down the public interest... It's a public interest safety valve process.”

O’Connor said a survey of police hospitality showed most officers acted with common sense when it came to dealing with the media, and said officers were usually offered “tea and sandwiches” by journalists, rather than the “fashionable alternatives” received by some senior officers appearing before the inquiry.

The review found 298 examples of inappropriate hospitality. Roger Baker, from HMIC, first provided this updated figure to the inquiry last week.