Former Tory Cabinet minister Lord Fowler today called for an independent inquiry into phone-hacking.
Following the arrest of two senior journalists at the News of the World, Lord Fowler told the Lords there had been a "total abuse of power" by parts of the press and called for an independent inquiry to prevent future scandals.
"Is it not already clear there has been total abuse of power involving some parts of the press in this area?" he asked.
"Have we not seen a five year delay in the investigation, a public dispute now taking place between the director of public prosecutions and Metropolitan police and the utter failure of any system to prevent such wrong-doing?"
Home Office minister Lord Wallace said it was inappropriate to comment on an ongoing investigation but agreed the press had not acted responsibly.
"The relationship between the press and the government rests upon the belief that it should be free but responsible," he said.
"Like bankers in a free market they ask for light regulation in exchange for behaving responsibly. Newspapers, like bankers, have not always been as responsible to their obligations in recent years."
The strongest words of condemnation came from Lord Prescott, one of the alleged victims of phone-hacking, who said intercepting voicemails and payments to police for information were signs of endemic criminal activity by NoW journalists.
He called on the government to delay the decision to allow News International to purchase a majority stake in broadcaster BSkyB until the police investigation concludes.
"It is totally unacceptable for a company involved in criminal activity at all levels to be given control of BSkyB," the former deputy prime minister said.
Yesterday, former news editor Ian Edmondson and chief reporter Neville Thurlbeck were arrested on suspicion of conspiring to intercept communications and unlawfully intercepting voicemail messages.
The two men voluntarily reported to police stations and were released last night on bail until September. Both their houses were searched, along with Mr Thurlbeck's office and computer.
New doubts were also raised yesterday over the depth of the Met's original investigation, when the director of public prosecutions Keir Starmer told the home affairs select committee that the Crown Prosecution Service (CPS) had not advised the police to limit the definition of phone hacking to voicemails intercepted before they were heard by the intended recipient.
Acting deputy commissioner John Yates has maintained that the CPS adopted a narrow legal definition, which limited the Met's investigation and influenced his claim that there were only 10-12 victims.
Far more alleged victims have since emerged, undermining the News of the World's assertion that phone hacking was the work of a "rogue reporter" Clive Goodman and private detective Glenn Mulcaire, who both served prison terms after pleading guilty to intercepting voicemails in 2007.