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Britain's reputation as an Internet-friendly creative hub was in jeopardy today as websites voiced their anger at draconian attempts to regulate online commentary and news.

Some website founders told The Independent that they were considering moving their businesses overseas in order to escape the risk of crippling legal costs resulting from their inclusion within press reforms introduced on Monday in a Royal Charter.

The warnings came as several established media organisations signalled that they would not be signing up to the new regulatory system.

The Spectator magazine produced a front page with the single word No. Ian Hislop, editor of Private Eye, said he saw no reason to join. At the moment I'm out, he said.

Four of Britain's largest newspaper groups, including the publishers of The Telegraph, The Daily Mail and The Sun, were tonight taking high level legal advice amid speculation that they might set up a breakaway press regulatory system. In an email to readers, Daily Telegraph deputy editor Benedict Brogan expressed the personal view that we should note the outcome, thank the politicians for their engagement, and quietly but firmly decline to take part.

But the question of internet regulation could prove even thornier. The influential Association of Online Publishers (AOP) tonight issued a statement to say it had major concerns about the charter, particularly over the threat of punitive awards in the libel courts for those who do not join the regulatory system. The organisation's chairman John Barnes said: There are major concerns about Exemplary Damages and arbitration and AOP is concerned that the new system will just not work.

The charter will undoubtedly have a chilling effect on everyday people's web use, the freedom of speech group Index on Censorship said. Bloggers could find themselves subject to exemplary damages in court, due to the fact that they were not part of a regulator that was not intended for them in the first place. This mess of legislation has been thrown together with alarming haste: there's little doubt we'll repent for a while to come.

Camilla Wright, who founded the entertainment website Popbitch, said she would be prepared to move the site to America to avoid being subject to a regulator which will have power over websites which produce gossip about celebrities, other public figures or other persons in the news.

She said: It will put some people out of business I would have thought. It would be a massive step to turn Popbitch into a North American publication and get First Amendment protection but it would not be out of the question. I would not want to move out of the UK but it would be a sad day to stop publishing because of a law brought in to help rein in the excesses of some newspapers.

Jamie East, founder of another entertainment site Holy Moly, said he was confused by the proposals and why Twitter is seemingly exempt from regulation. Making Twitter exempt is weird because the majority of stories on celebrity blogs are derived from Twitter anyway - you could argue it is more of a news feed than a social network.

Excerpt from:
Press 'deal' offers more questions than answers