The Daily Telegraph is criticised by the Press Complaints Commission today for secretly recording conversations between Liberal Democrat ministers and having reporters pose as constituents.
It upholds a complaint lodged last year by the party's president, Tim Farron MP, over the paper's use of subterfuge, ruling that the stories the Telegraph published as a result did not justify the methods it employed.
"On this occasion, the commission was not convinced that the public interest was such as to justify proportionately this level of subterfuge," the PCC says.
The undercover reporters taped Vince Cable boasting he had "declared war" on Rupert Murdoch when, as business secretary, he was due to rule on whether News Corporation should be allowed to take full control of BSkyB. The story was leaked to the BBC, which reported it the day before it appeared in the Daily Telegraph on 21 December.
Cable came close to being sacked and was stripped of his power to rule on media mergers by David Cameron, who handed them to the culture secretary Jeremy Hunt.
The paper also recorded separate conversations with other Lib Dems, including employment minister Ed Davey, who privately said he was opposed to housing and child benefit cuts despite defending coalition savings in October 2010.
The PCC, an industry body financed by newspaper and magazine publishers, says clandestine use of recording devices breaches the editors' code of conduct, which it enforces.
This states that papers "must not seek to obtain or publish material acquired by using hidden cameras or clandestine listening devices or hidden devices including tape recorders and cameras". Subterfuge is also outlawed unless there is a strong public interest.
The PCC acknowledges in its ruling: "there was a fine balance to be struck". But it said it "did not believe that the Telegraph – although acting no doubt with legitimate intent – had sufficient grounds, on a prima facie basis, to justify their decision to send the reporters in".
It added it had consistently advised newspapers not to go on "fishing expeditions" in the hope of finding stories and said it would be issuing futher guidance on the subject.
The Daily Telegraph editor, Tony Gallagher, says the paper accepts the ruling but adds in a statement that the PCC adjudication "has alarming implications for the future of investigative journalism".
The paper told the Commission it had received information from numerous anonymous sources, including voters as well as senior political figures, that Liberal Democrat ministers were contradicting their publicly-stated views in private. Its owner Telegraph Media Group told the PCC it had sought to expose this contradiction by sending in reporters and that it had been in the public interest to do so. It denied it had been on a "fishing expedition" because it had acted on tip off from politicians and the public.
Gallagher said: "We had a duty to investigate their conduct and.....to be effective the use of subterfuge was necessary. Our revelations led to the demotion of a member of the Cabinet, apologies from a string of junior ministers and condemnation from their party leader."
He added that the decision: "Increases the obstacles facing newspapers wishing to carry out legitimate inquiries based on material which is often by its nature incomplete - and it limits their ability to expose matters of legitimate public interest which those in positions of power would rather shield from public view."