The press and the public are close to reaching "a consensus" on what an improved regulatory system for the industry should look like, culture secretary Jeremy Hunt has claimed.
Hunt said "everyone recognises" that the reformed system needed to remain independent from the state - but that the current self-regulatory approach needed to be toughened up.
Speaking on Andrew Marr's BBC politics show on Sunday, the culture secretary said: "We have come much closer to a consensus on the way forward than I would perhaps have predicted.
"I think everyone agrees we don't want the state regulating content. We have one of the most lively presses in the world, they make life for me and my colleagues extremely uncomfortable and it is part of us keeping us on the straight and narrow. So we don't want politicians to be regulating content and I think that is completely agreed.
"But on the other hand we need to have a tougher system, and I would like it to be an industry-led system, but it needs to be properly independent of newspaper proprietors and newspaper editors and if a newspaper is going to be punished for stepping out of line then it needs to be a credible punishment.
"We need to avoid a system where people can just say 'I'm going to leave the PCC, I don't want anything to do with this'. I think it is going to be possible to find a way through this but we wait to see what Lord Justice Leveson says."
The new chairman of the Press Complaints Commission has proposed a "two-armed" regulator, one dealing with complaints and mediation and the other responsible for enforcing standards and compliance.
Lord Hunt told the Leveson inquiry earlier this month that "virtually the whole range of publications" he had spoken to about reform of the commission had shown willingness to proceed in the way he has suggested, including Northern and Shell, which withdrew from the commission last year.
He said at the time: "I sense there is a willingness to accept a fresh start and a new body."
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