Leveson: sustained by Kit Kats, how the parties – and Hacked Off – swallowed their differences and the Sunday night deal was done

Oliver Letwin was heavily outnumbered when he entered Ed Miliband’s Westminster office at around 10pm on Sunday night. The Conservatives’ policy chief, wearing garish mustard-coloured corduroy trousers and a sky blue shirt, looked rather crestfallen to be greeted by such a crowd.

The Cabinet Office minister had been scrambled to the Commons at this unusual hour to seal a deal on how newspapers should be regulated, almost four months after the Leveson inquiry reported. Already in the room were Mr Miliband; Nick Clegg, the Deputy Prime Minister; Harriet Harman, Labour’s deputy leader; Lord Falconer, Labour’s former Lord Chancellor and Rosie Winterton, Labour’s chief whip. Also round the table, to Mr Letwin’s apparent surprise, were no fewer than four members of the Hacked Off pressure group which has campaigned for a free and accountable press since the phone hacking scandal — Hugh Tomlinson; Brian Cathcart; and Evan Harris. Aides of Mr Miliband, Ms Harman and Mr Clegg were also present.

Mr Letwin was offered a sanctuary so he could consult David Cameron by telephone – the use of the waiting room across the corridor used by visitors to the Labour leader’s office. He did have some company – half a dozen civil servants, who provided factual rather than political advice. The absence of Maria Miller, the Culture Secretary, raised Labour eyebrows. Cameron aides denied reports he was asleep while the deal was done, saying he received his final text message from Mr Letwin at 3.20am and by 6am today was in a conference call with advisers on the Leveson issue.

Four and a half hours after the talks began, at 2.30am today, an agreement was reached among the three political parties and which Hacked Off could also support. Mr Letwin and the civil servants were fortified by a takeaway pepperoni pizza while Miliband’s team relied on coffee, tea, Kit Kat and chocolate digestive biscuits. “People were scattered in different rooms; it was like a bad party,” said one participant.

Unusually, it was Mr Miliband who in effect chaired the talks. Mr Letwin sat next to him when he arrived. Also on their side of the table were Mr Clegg, Ms Harman and Lord Falconer. The four Hacked Off representatives sat opposite. The mood was amicable, as a deal was in sight. Mr Miliband announced at one point: “I have a piece of good news. Hugh Grant [the actor and Hacked Off campaigner] has left the country. He is on a plane to LA!” Everyone cheered.

Mr Letwin, Mr Cameron’s fixer-in-chief and a key bridge to the Liberal Democrats in the Coalition, is the architect of the device which enables Labour and the Lib Dems to argue that the new regulatory system is being “legally underpinned” as Lord Justice Leveson proposed, while allowing Mr Cameron to claim he had not crossed his self-imposed Rubicon of creating Britain’s first press law in 300 years. The mechanism is a Royal Charter, similar to the one which protects the independence of the BBC.

Hopes of agreement looked remote last Thursday when the Prime Minister, in the words of one insider, “threw his toys out of the pram.” He dramatically broke off the cross-party negotiations and said MPs would have to resolve the issue. Surprisingly, over the weekend Mr Cameron had second thoughts. His aides say this was because the joint proposal tabled by Mr Miliband and Mr Clegg last Friday was based on a Royal Charter rather than a “legislative Leveson”. Cameron aides claimed Labour demanded such a press law in talks earlier last week after being “spooked” by Hacked Off’s intense lobbying but retreated on Friday. The Prime Minister insists his gambit last Thursday “unblocked the logjam” after “hundreds of hours” of cross-party negotiations on Leveson.

Mr Cameron called Mr Clegg to Number 10 on Sunday afternoon to tell him he had a new proposal based on a Charter. That was the basis of the agreement. Labour insists the Cameron plan had only nine minor changes from the plan it issued jointly with the Lib Dems on Friday. “The only thing Cameron changed was the type face,” quipped one Labour aide. Labour dismissed as “ridiculous” the Tory claim that Mr Cameron’s actions forced Labour to drop its demands.

The Liberal Democrat leader, who has always been keen to secure a consensus so any new system would survive a change of government, was happy to take on the role of go-between. He put the revised Cameron plan to the Labour leader on the telephone and the talks were reconvened. Mr Clegg left the Sunday talks before midnight, citing an early morning engagement in Bristol to launch a £2bn package for the aerospace industry, but spoke on the phone to Mr Letwin at 12.30am.

There was another reason why Mr Cameron changed tack and gave ground. With Labour, the Lib Dems and perhaps 20 Tory MPs lined up against him, reports from Tory whips showed he was heading for a bruising Commons defeat tonight if the issue had been put to the vote as originally planned. “Cameron hoped Clegg would blink but he stood firm, to his credit,”

As all three parties claimed credit for the breakthrough, one Lib Dem insider said: “It was a good outcome but a messy and chaotic way to get there. Cameron didn’t have to have his tantrum and call off the talks. He handed the initiative to Miliband. If we’d have carried on talking, I think we would have ended up with the same result.”