A controversial law that could force publishers to pay the costs of the people who sue them, even if they win, is to be repealed, the government has announced. Section 40 of the Crime and Courts Act 2013, which was drawn up following the Leveson inquiry, poses “a threat to the freedom and sustainability of the press”, the government said on Monday. The provision, which was supported by celebrities such as Gary Lineker and Hugh Grant and the campaign group Hacked Off, had never been brought into force. The Guardian previously joined all other national newspaper groups in objecting to section 40, arguing it was not fit for purpose and would hurt the sort of investigative journalism that produced its own reporting on the Panama papers, as well that which uncovered the phone-hacking scandal that prompted the Leveson inquiry. In 2017, the Guardian said: “This is of no benefit to the public, as it will discourage newspapers from conducting difficult investigations and holding powerful people to account.” It added: “In complex and controversial cases such as terrorism, national security, or where deep source protection sits at the heart of a story, this chilling is likely to be particularly profound.” The Financial Times had argued that by keeping the law on the statute book but not in force it appeared to give ministers “unacceptable leverage with regard to the newspaper industry” and was “a legislative sword of Damocles”. Section 40 could require publishers to pay the costs of the people who sue them, even if they win, unless they are signed up to a state-backed regulator. No major publisher supports such a regulator. Some national newspapers are members of the Independent Press Standards Organisation, which is not state-sanctioned, while the Guardian is self-regulated. The only state-recognised press regulator is Impress, although most of its members are small or hyperlocal publications. Nathan Sparkes, the chief executive of Hacked Off, said: “Section 40 was designed to shield regulated newspapers from costly lawsuits brought by the rich and the powerful, it is the only way to guarantee the freedom and accountability of the press, and it would put an end to wealthy oligarchs seeking to silence critical reporting with meritless legal claims.”