Lord Justice Leveson has praised the regional newspaper industry, arguing criticisms of the "culture, practices and ethics of the press" do not apply to the sector, writes London Editor Graeme Demianyk.
He added the contribution local print journalists make to communities they serve is "truly without parallel", comments that were echoed by David Cameron in the House of Commons.
Against financial challenges posed by the recession and the internet, the appeal court judge urged the coalition Government to "look urgently" at how to "safeguard" the "much valued and important" local press.
Justice Leveson went on that the demise of local newspapers would be a "real loss for our democracy".
The Leveson report's proposed new law to "underpin" an independent press watchdog should "not provide an added burden to the regional and local press".
The report states: "(Regional newspapers) are less affected by the global availability of the biggest news stories but their contribution to local life is truly without parallel.
"Supported by advertisements, this source of income is increasingly migrating to the internet; local councils are producing local newsletters and therefore making less use of their local papers. Many are no longer financially viable and they are all under enormous pressure as they strive to re-write the business model necessary for survival.
"Yet their demise would be a huge setback for communities (where they report on local politics, occurrences in the local courts, local events, local sports and the like) and would be a real loss for our democracy.
"Although accuracy and similar complaints are made against local newspapers, the criticisms of culture, practices and ethics of the press that have been raised in this inquiry do not affect them: on the contrary, they have been much praised."
It adds: "The Government should look urgently as what action it might be able take to help safeguard the ongoing viability of this much valued and important part of the British press.
"It is clear to me that local, high-quality and trusted newspapers are good for our communities, our identity and our democracy and play an important social role."
Adrian Jeakings, president of the Newspaper Society, which represents the regional newspaper industry, made clear its was opposed to state regulation.
He said: "Local newspapers have always been vehemently opposed to any form of statutory involvement or underpinning in the regulation of the Press, including the oversight by Ofcom proposed in the report.
"This would impose an unacceptable regulatory burden on the industry, potentially inhibiting freedom of speech and the freedom to publish."