The section of the inquiry covering ethics and regulation of the press will report back within 12 months. The Prime Minister said the inquiry should be as 'robust as possible and get to the truth fastest and get to work the quickest'.
In a statement in the House of Commons, Mr Cameron also announced changes to the ministerial code stating that ministers will have to record and publish details of all their meetings with newspaper and other media proprietors, senior editors and executives. And he said the Metropolitan Police would appoint a senior public figure to advise them on how to interact with the media.
The inquiry will be established under the 2005 Inquiries Act and have the power to summon witnesses including newspaper reporters, management, proprietors, policemen and politicians of all parties to give evidence under oath and in public. Lord Justice Leveson will be assisted by a panel of senior independent figures with expertise in media, broadcasting, regulation and government.
Graham commented: 'To my mind, the most worrying aspect of this whole sorry saga are the allegations against the police. This underlines the importance of the Coalition's reforms to make police chiefs accountable to the public.
'It's a shame that Labour have bitterly opposed all these proposals to help increase accountability and restore faith in the police. Instead of throwing stones from their glass house, they should work with the Coalition on this crucial issue.'