Daily Mail editor Paul Dacre accused Hugh Grant and the Hacked Off campaign of “hijacking” the Leveson Inquiry and attempting to “wound” Associated Newspapers with the actor’s evidence.

In a marathon testimony that lasted almost four hours, Dacre said Associated’s statement that the actor had made “mendacious smears driven by his hatred of the media” was a “sensible” way of defending his newspapers and its publisher.

The statement was a response to Hugh Grant’s testimony at the Inquiry last November, when he described a 2007 story in the Mail on Sunday that claimed his relationship with Jemima Khan was on the rocks due to his late night calls with a “plummy-voiced” studio executive. Grant said the only way the paper could have sourced the story was through accessing his voicemail, and that he “would love to hear what their source was if it wasn’t phone hacking”.

Dacre stressed he knew of no cases of phone hacking at Associated’s titles.

Meanwhile, Hacked Off and the Media Standards Trust said in a statement that they “categorically refute” Dacre’s “baseless accusations”.

Dacre took the debate on press regulation to a new level today by suggesting a press card system for those signed up to a new regulatory system.

He proposed improving the “haphazard” press card system by transforming it into an “essential kitemark for ethical, proper journalism”.

He argued that press briefings, sporting events and other conferences in public office should be open only to those with such a card, and suggested reporters guilty of “gross malfeasance” have their cards withdrawn.

“It is in the interests of both sides, news providers and news obtainers; why should they not have the right to believe they are dealing with accredited journalists?” he asked, arguing that the cards would be used proof of reporters being “responsible journalists”.

He suggested a “civil contract” for every journalist working for an accredited news organisation, effectively requiring them to adhere to the rules of a new regulatory body.

He argued that an improved press regulator should “move more towards a General Medical Council or Law Society type structure where it seen as the regulatory and disciplinary authority for the industry”.

He said there were currently 17 bodies that were able to issue press cards, yet the existing cards “don’t mean much”.

Dacre’s proposals echo Independent editor Chris Blackhurst’s endorsement of Labour MP Ivan Lewis’ suggestion that journalists be “struck off” if they are found to have committed gross malpractice.

Yet Dacre added that the “beauty” of the system would be that the newspaper industry, rather than the state, would be policing journalists. This point, he stressed, made his proposal differ from the licensing of journalists, noting that statutory regulation of the press was “thoroughly, thoroughly undesirable”.

At an Inquiry seminar last September, Dacre said those who call for the licensing of reporters “should emigrate to Zimbabwe”.

Dacre said he supported Lord Hunt’s proposal made last week for contractual press regulations, calling it an “attractive” solution.

Elsewhere in his testimony Dacre was grilled by Robert Jay QC over his paper’s use of search agencies as uncovered by the 2006 reports arising from Operation Motorman, which looked into unlawful trading of information by newspapers. The Daily Mail was identified as the paper with the the most transactions, followed by the Sunday People and the Daily Mirror.

Dacre confirmed he was aware that the Daily Mail was using search agents before 2006, though not to the extent as revealed by the ICO reports. He added he was aware that the paper used private investigator Steve Whittamore around 2004 or 2005.

He contested that his reporters believed they were acting within the law, using Whittamore to obtain addresses and phone numbers, and added that private investigators were used because it was quicker than journalists conducting checks themselves.

He emphasised he took measures to stamp out the practice, noting that he sent emails and letters to staff in 2005 — after Whittamore’s trial — advising them about data protection.

“I moved decisively and ruthlessly to stamp it out. Other newspapers didn’t, and we did,” he said. More than once he claimed the BBC had “spent more” than his paper on search agencies.

Dacre was characteristically defensive when he was taken through a series of controversial Daily Mail stories. Quizzed about a story headed “Cancer danger of that night-time trip to the toilet”, and asked if it was the job of some reporters to sensationalise scientific research, Dacre disputed that his paper adopted “an irresponsible stance” on medical stories.

Regarding Jan Moir’s column about the death of singer Stephen Gately, which was originally headlined “Why there was nothing ‘natural’ about Stephen Gately’s death”, Dacre conceded that the piece could have “benefited from a little judicious subediting”.

However, Dacre stressed that he would “die in a ditch” to defend his columnists’ right to write what they wish. The Press Complaints Commission received over 20,000 complaints about Moir’s piece.

Dacre, largely seen as one of the most powerful editorial figures in British media, denied that  he imposed his will on his staff, arguing “they would leave” if he did so.

Wrapping up his testimony, Dacre said that British journalism should be “proud” that Mail Online last week became the biggest newspaper website in the world, and accused Robert Jay QC of painting a “very bleak” and “one-sided” picture of the paper.

The Inquiry continues tomorrow, with Sun editor Dominic Mohan, Times editor James Harding and former PCC chair Baroness Buscombe among those giving evidence.

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