BRITAIN'S main political parties and the newspaper industry remain deadlocked after the latest attempts to reach an agreement on regulation of the press following the phone-hacking scandal.

Last night, the three main parties at Westminster, after months of wrangling, finally struck a deal on changes to the proposed royal charter - establishing a new regulatory regime - that are intended to address some of the industry's concerns.

But the immediate response of the industry, wary of oversight by politicians, was negative.

The deal was stuck between Maria Miller, the Media Secretary, for the Conservatives; Harriet Harman, the Deputy Labour leader; and Lord Wallace of Tankerness for the Liberal ­Democrats. It will now go for endorsement by the Privy Council on October 30.

Ms Miller said the changes included provision of a fee-for-use new arbitration service, intended to deter speculative claims, with the option for regional and local newspapers to opt out altogether following a trial period.

It was also agreed that serving editors could be involved in drawing up a new code of conduct for the press, to be approved by an independent regulator.

"We have made really ­important changes which will make this charter work much better, ­safeguarding the freedom of the press and also, importantly, ­helping safeguard the future of our local press, which so many of us value so much," said Ms Miller, stressing: "We want to make sure that this works for the long term."

She also added that it was important that the agreed deal covered Scotland and was UK-wide.

The industry steering group, representing UK national, regional and local newspapers, made clear that while it would consider the proposals, it still had deep reservations. "This remains a charter written by politicians, imposed by politicians and controlled by politicians," it said. "It has not been approved by any of the newspapers or magazines it seeks to regulate."

The steering group pointed out that the industry's own proposed charter was "rejected by eight politicians, meeting in secret, and chaired by the same politician who is promoting the politicians' charter".

It added: "Lord Justice Leveson called for 'voluntary, independent self-regulation' of the press.

"It is impossible to see how a regulator operating under rules imposed by politicians and enforced by draconian and discriminatory provisions for damages and costs in civil cases, could be said to be either voluntary or independent."

Ms Miller made clear she stood by the "parliamentary lock" - that once the charter had been agreed, it could only be amended with the agreement of a two-thirds ­majority in both Houses of ­Parliament - which, she insisted, provided an important safeguard for the press.

But Chris Blackhurst from The Independent said on the back of the row over the Daily Mail's article on Ralph Miliband that it might be possible to get a two-thirds majority, "so you could have politicians in the future re-writing this charter, and for many in our industry that simply isn't on".

Bob Satchwell, the executive director of the Society of Editors, said: "What editors are concerned about certainly is that you can't have even the smallest loophole which will allow for the future, when there is another great row between politicians and the press, for the politicians to bring in some really draconian system of licensing of newspapers."