Labour is heading for a potentially bruising clash with UK news publishers over a controversial piece of post-Leveson press regulation. Shadow ministers are set to incur the wrath of some of Britain’s most powerful press bosses, including Rupert Murdoch, by opposing the repeal of a rule designed to force news publishers to sign up to the government-backed regulator. The rule, section 40 of the Crime and Courts Act, means any news organisation that has not signed up to the regulator will have to pay the legal costs of any libel trial they face, even if found not guilty. Section 40 has never been imposed, but the government is planning to repeal it in the forthcoming media bill. Labour’s decision to oppose this will set it against almost every national news organisation and threatens to reopen the rift between the party and the press caused by the Leveson inquiry a decade ago. A Labour spokesperson said: “The government is wrong to muddy the waters with a debate about repealing section 40, which is unnecessary as it has never been enacted and so repeal will not make any substantive difference. “The press play an important and valued role in our democracy and face many threats due to disinformation and misinformation. We need trusted journalism more than ever. It’s right that the press is held to the highest standards and are accountable for their reporting.” A Labour source added: “We know this will trigger a fight with the press, but it has been Labour policy for years to have section 40. It would look very odd not to stand up for it now the Tories are trying to repeal it.” The row over section 40 has its roots in the phone-hacking scandal and the subsequent Leveson inquiry. Following Lord Justice Leveson’s report, published in 2012, a press regulator known as Impress was set up with the backing of the government. However, it failed to get any national newspaper to sign up. Section 40 was meant to push news organisations to sign up to Impress. But it was never implemented, amid an outcry from editors and publishers, many of which instead signed up to the industry-backed Independent Press Standards Organisation. The Guardian is one of several publishers to oppose section 40, saying in 2017 it would discourage newspapers from conducting complex investigations for fear of being sued. Now the government is planning to repeal the law altogether, a move welcomed by the news industry. The issue is particularly sensitive at Murdoch’s News UK, which publishes the Sun and the Times, which are being closely watched for what party they will back at the next election. Owen Meredith, the chief executive of the News Media Association, said: “Repeal of section 40 is a Conservative government manifesto commitment, and it is absolutely right that it has been included in the media bill. “Forcing publishers to pay the costs of legal actions, win or lose, would be hugely damaging and further undermine both press freedom and the financial stability and plurality of UK news media.” Labour is not planning to block the wider media bill but is promising to oppose the repeal of section 40. Shadow ministers have not decided how they will enact this opposition, though officials say it could include tabling an amendment to exclude that part of the bill. If section 40 is repealed, campaigners are pushing Labour to promise to reinstate it after the next election. Nathan Sparkes, the chief executive of Hacked Off, said: “The government’s decision to repeal the measure will undermine freedom of the press for those publishers, while denying access to justice for the public against multimillionaire national newspapers.”