Hacking victims pressure British PM on media rules

* Inquiry expected to recommend tighter media restrictions

* Cameron says Britain must keep a free press

* Newspapers seek to keep form of self-regulation

By Tim Castle

LONDON, Oct 7 (Reuters) - Prime Minister David Cameron saidBritain would avoid "heavy-handed state intervention" of itsnational press after phone hacking victims urged him on Sundayto remain open-minded about the recommendations of an inquiryinto media ethics.

Actor Hugh Grant, singer Charlotte Church and more than 50other victims of press intrusion said in letter to Cameron theyfeared he had already decided to reject statutory regulation ofthe media before the inquiry's findings were published.

Cameron said he would not prejudge the inquiry and confirmedhe had told Grant he would implement its recommendationsproviding they were "not bonkers".

"It's quite clear people have been abused, people's familiesand lives have been torn up by press intrusion. The status quois not an option," he told BBC television.

Cameron ordered the wide-ranging investigation at the heightof a scandal last year into illegal phone hacking at RupertMurdoch's now-closed News of the World tabloid when it emergedthat reporters had hacked the phone of a murdered schoolgirl.

The inquiry, led by judge Brian Leveson, revealed theinadequacy of British newspapers' current system ofself-regulation and is expected to recommend a tougher regime toensure victims of press intrusion can receive effective redress.

Leveson has yet to publish his findings after eight monthsof hearings that ended in July.

Cameron will have to navigate a difficult political path inresponding to the recommendations to avoid being accused oftrampling on press freedoms or being soft on tabloid excesses,especially given his close ties to two of those who have beencharged with offences relating to phone hacking.

His ex-spin doctor Andy Coulson was a former News of theWorld editor and as was his friend Rebekah Brooks, who lateroversaw Murdoch's News International arm. Their trial has beenset for September next year.

"We don't want heavy-handed state intervention. We've got tohave a free press," Cameron said.

"We all want to put in place a sensible, regulatory system.We're hoping that Lord Justice Leveson is going to crack thisproblem for us, but we must let him do his work first."

Some newspapers have proposed a beefed up form ofcontractual self-regulation as a way of avoiding statutorycontrol, an approach the hacking victims rejected as inadequate.

Grant, a director of the Hacked Off lobby group thatorganised the letter to Cameron, said he wanted a new mediaregulator who would be independent of both the newspaperindustry and government.

"It's actually the way solicitors are now regulated, it'sthe way doctors are now regulated, and they're not complaining,"he told BBC television.

"I do not see the slightest danger to freedom of expression,freedom of speech from that."

(Editing by Alison Williams)

((tim.castle@thomsonreuters.com)(+44)(0)(207 542 7947))