How far the Leveson Inquiry could prejudice the ongoing police investigation into phone hacking, raised last week in a joint submission by the Metropolitan Police and the Crown Prosecution Service, took up much of the morning’s hearing at the Royal Courts of Justice.

The session was held to discuss the issue raised at last week’s hearing, namely concerns that an individual who is later charged may claim the Inquiry breached their right to a fair trial, as evidence will be heard before criminal trials have occurred. The hearing also debated journalists testifying anonymously, as well as further applications for core participant status.

Neil Garnham QC, representing the Met and CPS, told the Inquiry his concern was not only a risk of prejudicing criminal proceedings, but also the prospect that, in reporting the Inquiry, the media might “go beyond fair reporting” and damage the investigation.

Lord Justice Leveson replied that part one of the Inquiry, which will examine culture, practices, and ethics of the press, must create a “narrative” on which he will base any recommendations. Otherwise, he added, the Inquiry would “not be grounded in reality”.

He also questioned the practicalities of filtering information and evidence through the Met and CPS, which might then be subject to a judicial review. Were either the Met or CPS to raise any “red flags”, Leveson said, “the Inquiry could go on for a lifetime.”

Meanwhile, a legal representative for Surrey Police argued the force should be granted core participant status — which would allow them full accesses to documents produced during the inquiry and entitle them to give evidence either in person or through a lawyer.

He expressed concern that the Inquiry might trigger further bad press for the force, which has been criticised for not pursuing evidence that murdered teenager Milly Dowler’s phone was hacked by the News of the World in 2002. He added that several Surrey Police officers had been victims of phone hacking during the investigation into Dowler’s disappearance.

Leveson said that everyone had to “grin and bear” criticism in the public domain, including himself. “It is what a free press is all about,” he argued.

He also refuted Surrey Police’s argument that not granting them core participant status would severely limit their involvement in the Inquiry. He said the issue was “not contentious”, later adding that if there is anything the force could do to provide him with an accurate narrative, they would be given the opportunity to do so.

Leveson did, however, grant the National Union of Journalists core participant status, adding that one way for journalists to give evidence anonymously — an interest expressed by several reporters, the hearing was told — might be to do so through the union. Leveson stressed that the names of any journalists who had approached the Inquiry team will not be put into the public domain.

He also cautioned against identifying the newspaper with which anonymous witnesses are affiliated, arguing it might lead to the release of material that the paper “would feel obliged to deal with”.

Returning to the issue of the police investigation, Garnham expressed his concern that secret evidence kept by the inquiry and not revealed to the public could raise issues of fairness in criminal proceedings, namely that the evidence may be used in favour of defendant on trial.

Telegraph Media Group and Trinity Mirror were also granted core participant status.

The first hearing of the Inquiry will take place on 14 November, with victims’ evidence to be heard at the high court from 21 November. The Inquiry is likely to hear evidence from witnesses until February 2012.

Follow Index on Censorship’s coverage of the Leveson Inquiry on Twitter – @IndexLeveson.