If Westminster fails to create a UK-wide press regulator Holyrood should create one in consultation with the media, the expert group on the Leveson Report in Scotland has concluded.
The regulator could have the power to censure newspapers, magazines and websites, including "gossip" sites, while further regulation of social media such as Twitter may also be required, the group stated in a report released today.
Any suggestion that they are advocating "censorship" or "unprecedented political control" would be misguided, the panel chaired by former Solicitor-General for Scotland Lord McCluskey said.
Voluntary press regulation is unlikely to work, the report concluded. "We have little confidence that the voluntary 'opt in or opt out' model proposed by Leveson would work - whatever incentives were devised to encourage publishers to opt in," the report stated.
"The carrots proposed by Leveson are not sufficiently enticing, nor the sticks sufficiently intimidating, to put any real pressure on publishers to join a scheme that replaces light touch self-regulation."
In a letter to First Minister Alex Salmond accompanying the report, Lord McCluskey said: "The jurisdiction of the regulatory body proposed by Leveson must extend to all publishers of news related material and not be a voluntary system."
He added: "If the London discussions fail to produce a compliant body, we suggest that Scottish ministers consider introducing legislation separately to ensure that those resident in Scotland can be adequately protected from abuse."
If "significant" publishers opt out, "the whole system breaks down" and "we would be left with no system at all", the report stated.
"All and any news-related publisher may be considered significant, since all and any may be capable of causing the very harm which Leveson is committed to addressing."
Regulation in other countries extends to social media sites such as Twitter, the report notes.
"We draw the attention of the legislature to the particular case of the use of social media (Twitter et al) in relation to publicising/circulating news-related publications and the possible need for the regulation in this regard."
It added: "It is for the legislature to specify the criteria for determining which news-related publications are to be subject to the jurisdiction of the new independent system of regulation."
The traditional reasons for keeping press regulation voluntary, as opposed to the statutory regulation of broadcasters, "no longer applies in a world of instant (and often freely available) electronic access to the whole range of news media", the panel concluded.
"The argument for treating the printed press differently in this respect from other media is no longer persuasive."
In a draft Bill accompanying the report, the panel defines a "relevant publisher" as "a newspaper, magazine or periodical containing news-related material or by electronic means (including a website), news-related material (whether or not related to a newspaper, magazine or periodical)".
"News-related material" extends to "gossip about celebrities, other public figures or other persons in the news" while "gossip" is defined as "assertions of fact about the private or family life of persons if the information published is calumnious, defamatory or scandalous".
The report echoes Leveson's criticisms about "media misconduct", highlighting "past and present contacts and relationships between the press and others in public life, notable press owners and politicians, and politicians and the police, and the failure of existing and past regulatory regimes to avert...improper and sometimes illegal conduct".
While stressing the importance of a free press, the report notes that "the rights of a newspaper proprietor to further his or her own political or commercial agenda are not necessarily to be allowed to take precedence over the rights of citizens and the rule of law".
Regulation must be limited to ensure that the press is not "subjected to regulation that might undermine or even threaten their role as a fearless critic of government and independent investigator and reporter".
The press should not be subjected to restrictions faced by public services broadcasters like the BBC, such as the legal requirement to be politically impartial, the report stated.
"An independent non-government body with powers markedly less intrusive than those statutorily created to regulate other pillars of democracy does not appear to us to pose any threat to democracy," the report stated.
"In our judgment, 'statutory underpinning' to achieve the Leveson purposes fits perfectly well with the best democratic traditions."
The report added: "Any suggestion that, by enacting underpinning legislation on Leveson lines, the legislature would somehow be embarking on an unprecedented exercise in political control appears to be based on a failure to grasp the existing reach of law in relation to press publications.
"The conclusion that we draw is not that Leveson-recommended legislation would somehow introduce a form of censorship incompatible with our traditions but that to legislate on Leveson lines would be consistent with the long-established civil and democratic practice whereby the Legislature intervenes to curb intolerable intrusions upon the established rights of citizens. No one is above the law."
Mr Salmond said: "While there is a huge amount of uncertainty and division surrounding how Westminster is going to take forward the Leveson recommendations, I am hopeful that in Scotland all parties in the Parliament can continue to work together to find an acceptable way forward.
"Lord McCluskey's group has delivered an extremely thorough piece of work looking at how the proposals made by Lord Justice Leveson could be applied in the context of Scots law, including draft legislation.
"We will now take the time to consider all of their suggestions in full and discuss the proposals with the other political parties and other stakeholders.
"The report is admirably clear. It is for the parliaments in London and in Scotland to establish a recognition process.
"It is for the press to bring forward a voluntary regulatory body compliant with Leveson principles. I hope that this is still possible.
"The Scottish Government indicated at the time of Leveson's report that we wanted to implement his key proposals of a voluntary self-regulatory system set up by the press with statutory underpinning.
"Since Leveson reported, all parties in the Parliament have taken part in a cross-party effort that has seen the leaders hold talks with Hacked Off, the Media Standards Trust and representatives of the press with a commitment to meet with the UK Government after their position becomes clearer.
"These efforts will continue and the Scottish Government will report back to Parliament after Easter on the progress of these talks."
However, Scottish Labour Leader Johann Lamont said: "We support the Leveson recommendations because we believe they would protect the public from the excesses of the press and give justice to victims while preserving the freedom of the press which is vital to the public interest.
"We agreed with the First Minister that this group should look solely at the technicalities of implementing Leveson in Scots Law. We did not agree to the Leveson recommendations being re-written or built upon.
"Instead of that the First Minister has given Lord McCluskey a different remit from that agreed, on a panel on which we were not allowed a representative.
"While Lord McCluskey and his fellow panel members are not to be criticised, rather than pursue the original agreed objective they were asked to rework Leveson on a ridiculously short timescale.
"That in itself appears to be bad faith on the First Minister's part.
"We hope he will take forward the recommendation that Scotland would be best served by having a UK wide solution.
"Leveson is about addressing the rights of victims and protecting the public. It should not be used by politicians as an attempt to control the press."
Scottish Conservative leader Ruth Davidson said: "This is a shameless attempt by the First Minister to shackle a free press at a time of the utmost political sensitivity.
"The expert group was instructed by Alex Salmond to find ways of implementing a law to control the press and that's exactly what it has done.
"Its remit was so narrow it was inevitable a proposal for a new press law would be the outcome.
"It is unacceptable that both the operation and funding of the new regulator would be overseen by a 'recognition commissioner' appointed by Scottish Government ministers.
"This is not statutory underpinning but statutory control which would give Scotland some of the most draconian press controls in the western world.
"With the First Minister now saying he will consider the expert group's findings there's a real danger the threat of legislation will be kept hanging over the heads of editors as the referendum approaches.
"Even more astonishing is the proposal for the regulator to be responsible for news comment on the internet and for the newspaper industry to provide all the funds.
"It cannot be right that an industry already in crisis should be expected to pay for the regulation of the very thing that's killing it off.
"We are however pleased that the expert group has recognised there's no specific need for a Scotland-only regulator and a single regulator can operate across the whole UK as at present."
Scottish Liberal Democrat leader Willie Rennie said: "The proposal to compel newspapers to join a regulated body was unexpected. The potential consequences of that need to be properly looked at.
"Overall, I have always hoped for a UK-wide system to protect victims of abuses. That would accept the reality of how most modern newspapers expect to cover the whole of the UK.
"I hope that all Scottish MPs will attend the vote on Monday to support statutory underpinning for the self-regulation elsewhere in the UK. That will increase the effectiveness of any system in Scotland. It will keep the options on the table for Scotland.
"I recognise that this will be a hurdle for SNP MPs but I hope they will see the sense in being able to underpin the protection of Scots across the UK."
Scottish Green co-convener Patrick Harvie said: "Greens support the implementation of the Leveson proposals, but the McCluskey report appears to go much further than anyone had expected.
"To include every source of news coverage would result in a torrent of complaints about every website, every blog, even every single tweet. I cannot see how this is remotely practical, even if it was desirable.
"If the will exists in Scotland to see the Leveson proposals implemented, it should not be beyond our ability to ensure that professional, commercial media organisations are properly regulated, but individual citizens are not caught up in the same system.
"The most urgent priority is to build as much consensus as possible - which sadly however cannot now include the Prime Minister - to ensure that Westminster votes on Monday for the full implementation of Leveson, with statutory underpinning.
"To that end, I would urge the SNP MPs to recognise that this decision will have a clear political impact in Scotland, and that they should work with other opposition parties against Mr Cameron's plan."
The Scottish Newspaper Society said in a statement: "We are in favour of UK-wide, non-statutory regulation and are opposed to a Scotland-only solution, which we believe will be a costly burden on many small publishers who are already facing economic hardship."
