Lord Justice Leveson revealed his personal feelings on press reform today, telling the inquiry he "would be surprised if government regulation ever even entered my mind”.

The judge was speaking to TMG chief executive Murdoch MacLennan, who gave oral evidence to the inquiry. MacLennan had expressed concern over the affordability of future regulation, especially in regard to privacy and libel actions.

Leveson also expressed his desire for change, telling the inquiry that he does not wish his eventual report to be something “everybody likes or rubbishes” and that ends up just sitting "on a shelf”.

The inquiry also heard from Financial Times editor Lionel Barber, who put forward ideas on independent regulation. He advocated a regulatory body with new powers – including the power to investigate – that would ensure compliance from all newspapers and some online organisations.

He said "for too long, the PCC was dominated by insiders”, adding that “outsiders”, including experienced journalists and other professionals, should have a seat on the body.

Barber expressed relief when Leveson said he was not interested in setting up a body “full of lawyers” but was interested in a low-cost libel mediation system.

Both MacLennan and Barber confirmed that PCC chairman Lord Hunt is consulting newspapers over press reform and plans to announce his suggestions before the inquiry ends later this year.