A key part of the campaign to "reform" the press is being financed by senior Labour figures with direct personal and professional interests in muzzling the media.
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The Sunday Telegraph has established that "Hacked Off," a high-profile campaign against press invasions of privacy, is partly funded and staffed by Sovereign Strategy, a controversial company described by the Guardian newspaper as "Labour's favourite lobbyist."
Hacked Off's best-known supporter is the actor Hugh Grant, who has repeatedly appeared on television as the face of its campaign.
An employee of Sovereign Strategy, Horatio Mortimer, described on its website as its "strategic consultant," has been seconded to work for Hacked Off.
Sovereign Strategy is also paying some of Hacked Off's administrative, accommodation and travel costs.
Sovereign Strategy is owned by Alan Donnelly, the former Labour leader in the European Parliament and current chairman of David Miliband's constituency Labour party.
Mr Donnelly, who is openly gay, lives with Peter Power, an ex-spokesman for and close associate of the former Business Secretary, Lord Mandelson.
Sovereign Strategy has been repeatedly investigated by the press, including The Times and The Sunday Times, owned by News International.
In February last year Sovereign Strategy was accused by The Times of involvement in a "cash-for-access" operation to serving Labour ministers.
The North East Economic Forum, run by Sovereign Strategy, organised a networking event with three ministers on the margins of a regional Cabinet meeting. Businessmen were charged £5,000 to attend.
In 2006, The Sunday Times revealed that Sovereign Strategy, which represents major nuclear industry clients, paid £2,000 to help refurbish Mr Miliband's constituency office shortly before he became the minister responsible for the nuclear industry.
Sovereign Strategy has also received highly critical coverage for paying tens of thousands of pounds to serving MPs and peers, defying a ban on the practice by the lobbying trade body, the Association of Professional Political Consultants.
It employed at least three ex-ministers, the former environment secretary Jack Cunningham, the former health secretary Alan Milburn and the former defence minister Lewis Moonie, while they were backbench MPs or peers.
Lord Cunningham, then a board member of Sovereign Strategy, helped arrange meetings with his former Labour ministerial colleagues on behalf of the lobbyist's clients.
Sovereign Strategy says it stopped paying parliamentarians in 2007.
Two years later, The Sunday Times reported that Lord Moonie had offered to help with amending laws for £30,000, saying "the thing about the Lords is there's virtually nothing they can do" about breaches of the rules.
The peer was caught by a sting involving subterfuge, one of the practices the Hacked Off campaign has questioned. The paper said its use of undercover reporters was in the public interest.
The Lords privileges committee said there was "insufficient evidence to establish to the standards of proof we have adopted" that Lord Moonie had broken its code of conduct but ordered the peer to apologise to the House for his "wholly inappropriate attitude to the rules."
Mr Donnelly's business partner and chief executive of Sovereign Strategy, Iain Malcolm, is Labour leader of South Tyneside council, where the press exposed his involvement in a local scandal known as "Airportgate."
In the affair, described by the Tyneside MP and former Labour chief whip Nick Brown as "indefensible" and "one of the great contemporary scandals," Newcastle airport, jointly owned by South Tyneside and six other North East councils, was refinanced in a controversial £377 million deal with Sir Fred Goodwin's Royal Bank of Scotland, incurring huge potential liabilities to council taxpayers.
The airport's two executive directors were paid a percentage of the loan as a personal bonus – pocketing a total of £8.5 million between them.
The deal was approved by Mr Malcolm, as a member of the airport's five-strong remuneration committee, ignoring warnings from a senior colleague that the deal was "very difficult to justify" and might not achieve "best value" for the taxpayer.
As revealed by The Sunday Telegraph, Mr Malcolm then spent at least £75,000 of council taxpayers' money on taking the social networking site Twitter to court in California, accusing one of his own councillors of being the source of the "Airportgate" story and the author of anonymous tweets and blogs attacking him.
Mr Malcolm obtained a subpoena, described by media lawyers as "inappropriate" and "worrying," requiring Twitter to hand over its account details.
Sovereign Strategy was and remains a major donor to the Labour Party, giving it at least £160,000 over the last nine years. Mr Donnelly has personally given a further £41,000.
Mr Donnelly is also closely linked to Max Mosley, who successfully sued the News of the World for breach of privacy after it revealed that he had indulged in sado-mascochistic orgies with prostitutes.
Mr Donnelly is chief steward of Formula One and Sovereign Strategy is based at the same Trafalgar Square address as Mr Mosley's charitable arm, the FIA Foundation.
The FIA Foundation's director general, David Ward, was chief policy adviser to the former Labour leader, John Smith.
Mr Mosley, who has financed civil actions taken by alleged victims of phone-hacking against the News of the World, has been a client of Sovereign Strategy.
Hacked Off makes no mention of Sovereign Strategy on the "funding" section of its own website, but one of its leaders, Brian Cathcart, a journalism professor at Kingston University, confirmed Mr Mortimer's role and Sovereign's help with administrative, hotel and taxi expenses.
Separately, The Sunday Telegraph has also learned that one of the key members of Lord Justice Leveson's inquiry into privacy and the press is chairman of a charity which was itself censured for multiple breaches of privacy laws.
Sir David Bell is one of a six-strong panel appointed by the Prime Minister, David Cameron, to assist Lord Leveson in his work.
However Sir David chairs a charity, Common Purpose, which was reprimanded by the Information Commissioner in 2009 for six probable breaches of the Data Protection Act.
Common Purpose is an organisation for training "future leaders" in government and the community. It has been accused by some anti-EU campaigners of being a political front to promote pro-Brussels values, which it denies.
Common Purpose fell foul of data protection laws after trying to block these campaigners from investigating its finances.
The organisation compiled a "blacklist" of individuals who had made Freedom of Information Act (FOI) requests about it to councils and other public bodies.
It is heavily funded by such bodies. In some cases Common Purpose the names were released to Common Purpose unlawfully through informal approaches to its contacts at councils.
It then circulated the "blacklist," including the names, private home and email addresses and telephone numbers of the people concerned, to its other public sector clients, telling them that the individuals were "vexatious" people causing it "harassment and disruption" whose requests should be ignored.
The circulation of such private details is also illegal under the Data Protection Act. The act says that personal data must not be shared with third parties without the person's consent.
In 2009 the Information Commissioner, Richard Thomas, upheld six complaints against Common Purpose over the practice.
In decision notices seen by The Sunday Telegraph, the Commissioner stated that it was "unlikely" that Common Purpose's behaviour had complied with the Data Protection Act.
The Commissioner's office said it had "advised [Common Purpose] to take steps to comply with the law in future." Common Purpose had to take "remedial action" in five of the cases.
Sir David was appointed to the Leveson inquiry because of his role as chairman and co-founder of the Media Standards Trust, which campaigns for for "transparency and accountability in news" and against "all forms of illegal intrusion by the press."
The Media Standards Trust is another supporter, with Sovereign Strategy, of the Hacked Off campaign, paying for the campaign's website.
There are close links between the Media Standards Trust and Common Purpose. The trust's deputy chairman and other co-founder, Julia Middleton, is chief executive of Common Purpose.
The two organisations shared offices until recently. Chris Bryant, the Labour MP who has led the parliamentary campaign on the phone-hacking issue, is a former manager at Common Purpose.
One of those who complained to the Information Commissioner, Michael White, from Walton-on-Thames, Surrey, said: "My private address was in their blacklist and I was described as a vexatious and harassing individual. I felt sick to think that Common Purpose had passed this around half the public authorities in the country.
"They got this data from their contacts in councils. The hypocrisy is stunning. These people quite rightly condemn invasions of privacy by the press while invading people's privacy themselves. They demand transparency for other people and fight it for themselves."
Ms Middleton said last night: "As an organisation we made a genuine mistake in this instance. We did so following what we believed to be sound advice from the Information Commissioner's Office, but it was in a very rapidly changing legal context. We have since changed our practices accordingly."
A Common Purpose spokeswoman said the charity no longer held the offending list and no further action had been taken against it.
And in previously unreported remarks, Lord Leveson has repeatedly criticised the media.
Last November, giving the Roscoe Lecture, he said: "My 40 year experience [in the law]… means that I know not to believe the headlines in the press consistently suggesting that judges sentence too leniently or that the guilty 'get away with it."
As chairman of the Sentencing Council, he complained: "A consultation on the draft assault [sentencing] guideline started last week, accompanied by the usual flurry of media reporting.
"From the headlines, you might think that different documents were being discussed."
Last May he attacked the influence of "media anecdote" in the debate on sentencing and said: "Addressing media coverage is one of the areas the [Sentencing] Council will be seeking to tackle."
Martin Moore, a spokesman for the Hacked Off campaign, said: "We met with Lord Cunningham and others including Alan Donnelly who said they could help us however we liked.
"The extent of their help was minimal and had no bearing on the substantive stuff."
Sovereign Strategy declined to comment.