By Andrew Osborn and Kate Holton
LONDON (Reuters) - Prime Minister David Cameron abruptly ended cross-party talks on regulating Britain's famously aggressive newspapers on Thursday and tabled a vote on light-touch rules instead, prompting allegations he is in thrall to the press barons.
Victims of scandal-hungry tabloids who have had their phones hacked and life stories misreported have pressed Cameron to implement the findings of a judge-led inquiry that recommended the creation of a tough press regulator backed by legislation.
It is a stance that has been broadly backed by the opposition Labour party and the Liberal Democrats, the junior party in Cameron's two-party coalition government, but one which has been fiercely resisted by newspaper owners who argue such statutory legislation would imperil press freedom.
Cameron sided with the newspapers on Thursday and put himself at odds - not for the first time - with the LibDems, telling a news conference that putting detailed legislation on the statute book was "fundamentally wrong in principle".
"It is wrong to cross that Rubicon by writing key elements of press regulation into the law of the land," he said. "It is wrong to create a vehicle whereby politicians could in future impose regulations and obligations on the free press."
His decision to force a vote in parliament on Monday on his own proposals - a form of self-regulation that would encourage papers to opt into a new regulatory framework policed by a regulator - sets up a standoff with his political opponents that he is far from sure of winning.
Cameron's Conservatives have 303 seats in the 650-member lower house of parliament, the LibDems 57, and Labour 255.
Under Cameron's proposals, newspapers could be fined up to 1 million pounds ($1.5 million), be obliged to print apologies, and face exemplary damages if they did not opt in.
Hacked Off, representing the victims of newspaper behavior, suggested Cameron was trying to curry favor with newspaper owners ahead of an election in 2015 at a time when his Conservative party is 10 percent behind in the opinion polls.
"This is a shameless betrayal of the victims of press abuse," Brian Cathcart, the group's executive director, said, adding that Cameron's self-regulation proposals were far too weak and would allow editors "to write their own rules and handpick the people who ran the regulator".
Cameron ordered the judge-led inquiry into the newspapers' behavior after Rupert Murdoch's now-defunct News of the World admitted hacking into phone messages on an industrial scale to generate salacious front-page stories.
Police investigating the scandal arrested four current and former journalists from the rival Mirror Group Newspaper (MGN) group on Thursday.
The examination of media tactics soon broadened out to reveal the close relationship between Britain's media bosses and Cameron, embarrassing the prime minister by publishing friendly text messages that called his judgment into question.
Cameron denied being in thrall to the press, saying editors hated elements of his proposals, but Ed Miliband, the leader of the opposition Labour party, described Cameron's demarche as a "historic mistake".
Press bodies welcomed Cameron's actions in a statement, saying they were ready to get the system up and running.
Analysts said Cameron was gambling he could get either a cross-party deal before Monday's vote, or that he could win the vote. Roy Greenslade, professor of Journalism at London's City University, said the outcome hung "by a parliamentary thread".
"Cameron is now clearly playing the publishers card," Greenslade told Reuters. "He doesn't want to be seen to be doing anything (against the media groups)." ($1 = 0.6700 British pounds)
(Editing by Guy Faulconbridge and Alison Williams)