A former chairman of the Press Complaints Commission has told the Leveson Inquiry the body “was never a regulator”.

Lord Wakeham, who headed the body from 1995 to 2001, said today his job was to try and raise press standards.

He told the inquiry the industry wanted a chairman “with a bit of clout” and described threatening editors by claiming he would tell the Prime Minister they were “impossible”.

He urged Lord Justice Leveson to rule out statutory regulation and said Parliament would strengthen restraints on the press “whenever they find an opportunity”.

The judge replied: “There’s no question of my suggesting statutory control of the press at all... there isn’t a chance of me recommending that.

“The former chairman said Northern and Shell’s decision to quit the PCC is “serious” and advocated Lord Hunt’s proposal for a contract requiring proprietors to sign up to industry regulation.

Wakeham said changes made to the PCC code following the death of Princess Diana were “right at the time and a significant improvement”, telling the inquiry “you have to pick the moment when the press was in the mood” to accept a tougher code.

He added: “I think [the changes] did make a difference. The crux of what I tried to do was to say that the editor is responsible for what appears in his newspaper.""The respect of the PCC has gone down in recent years because they haven't had the high profile of complaints that we had... The system in my day was it was not right to do anything about it if the person didn't complain, and there was good reason for that.”

He added: “The Press Complaints Commission, in my view, was the best way of protecting the public and I didn’t want to see it destroyed in the way that it more or less has been in the last few years.”

He said he was concerned the Human Rights Act had introduced a privacy law only available to the “rich and famous” in court, meaning the PCC had become an “on the cheap” way of resolving complaints which lowered standards. Wakeham, who chaired a subcommittee on the second Calcutt report, said he told then prime minister John Major introducing a privacy law would be difficult.

He added: “It would not have been very easy to define the public interest, secondly I did not think that it would be at all easy to get the legislation through Parliament, thirdly I did not think it would protect the people who read newspapers. The privacy law this would have created would have been very difficult for public unless they are rich and not quite as bad for newspapers as they pretend.”

Wakeham told the inquiry how he called Rupert Murdoch after the News of the World printed pictures of Lord Spencer’s wife in a nursing home – when Piers Morgan edited the paper – to send a message to the press the PCC “weren’t to be trifled with”.

He added: “It was a very serious and I wanted to get the message over... proprietors had a responsibility for their editors in behaving in a reasonable and proper way... I thought it was a good example to rub the point home.”

He described calling Buckingham Palace after a newspaper published topless photographs of a member of the royal family, urging them to complain to the PCC before it was mentioned in Parliament. They were reluctant, but agreed after Wakeham said he would issue a statement on the matter.

He added: “Within 48 hours the editor of the paper had apologised profusely and so on for a serious error of judgment and the matter was dealt with. It would not have been dealt with if I hadn’t waded in to do it.”