Mail on Sunday editor Peter Wright's witness statement has now been published on the Leveson inquiry website.
Liz Hartley has now finished giving evidence.
David Sherborne, the lawyer acting for Hugh Grant and others, is on his feet.
Sherborne says he has waited eight weeks to put questions to Associated Newspapers on what he describes as "plummygate".
He adds that it is clearly for Paul Dacre to explain the "mendacious" comment when he gives evidence on 6 February.
Sherborne wants the Daily Mail journalists behind the story to give evidence on oath on 6 February to find the source of the story.
Leveson says he will think about it.
Jay asks Hartley whether it could fairly have been assumed that Grant was acting "mendaciously" with his evidence.
Hartley says that to make "a very serious allegation against us on evidence as thin as this was not something that should have been done".
She says Grant has used speculation "to accuse our group of phone hacking, which is a very serious allegation. We respond by defending ourselves."
Leveson notes: "And you're responding by accusing him of perjury."
According to Jay, Hartley says in her witness statement that the inference – drawn by Grant – that the story must have been the product of voicemail interception makes no sense.
Grant and his solicitors denied that there was any plummy-voiced woman, Hartley tells Leveson.
She says it was denied that Grant knew a plummy-voiced woman of that description.
"If you look at the detail in the piece it's not the sort of detail you would have got from a voicemail interception. There is detail in there which has come from a source," she says.
Jay asks Hartley about the Mail on Sunday's 2007 story that Grant was having conversations with a "plummy-voiced" woman.
Hartley says she doesn't know any more detail about the source, other than that it is someone who regularly spoke to the socialite Jemima Khan, as the Mail said in a statement at the time.
Back on the "mendacious smears" point, Lord Justice Leveson highlights the seriousness of the Mail's allegation – he says the word "mendacious" means "deliberately false".
Jonathan Caplan QC, counsel for Associated Newspapers, interjects. Leveson says the large question is whether "all of this" permits an allegation of deliberate dishonesty.
Nine journalists appear to have submitted evidence on the Hugh Grant case as part of the statement submitted by Liz Hartley.
The inquiry has now resumed.
In her written statement, Hartley says that Hugh Grant's evidence contained a number of "significant inaccuracies".
Leveson interjects, and says that the evidence may not be inaccurate but that it may be better described as "incomplete".
Hartley says: "What I'm simply trying to do is put the evidence that we have."
The inquiry is taking a short break.
Jay asks how the papers learned that Tin Lan Hong was booked into the Portland hospital, when she did so under a false name, and whether there was a leak.
He says he is attempting to show that Grant's allegations were reasonable given what he knew at the time.
Hartley says the paper worked out Hong's location by "a piece of logic".
Back, briefly, on the "mendacious smears" statement, she says that "the anger about [Hugh Grant's] allegations relates to the issue of phone hacking".
Hartley says the Daily Mail reporter was asked by the news editor to wait outside Ting Lan Hong's home, but left when Grant made a request to the paper.
Hartley says that newspapers will regularly get notices or warnings from celebrities when they wish to be given some space, and they comply with that.
However, she says that in the Hugh Grant case, it "wasn't entirely clear" what the position was.
The Hacked Off campaigner, Thais Portilho Shrimpton, has just tweeted:
(Turns out I was with Mr Grant's agent after that date when she had a call from Daily Mail journalist asking what the name of the baby was)
Hartley says she would expect the two journalists who were attempting to contact Tin Lan Hong to have kept notes, but that she hasn't checked them.
Jay asks whether the right response would have been for the journalists to back off and stop calling Ms Hong.
Hartley argues that the calls were actually to Hugh Grant's publicist. She says the journalists were not clear "what the position was" and were attempting to establish the accuracy of the story.
"In some circumstances like this people do talk to the media and make statements … It seems to be by 21 October, after two days, I don't think further calls were made to her," says Hartley.
Hartley says she does not know the source of the story on Grant and Ting Lan Hong having a child, other than that it was from "Mr Grant's celebrity circle" of friends.
She says the difficulty was that journalists were attempting to get in contact with Ms Hong to establish the accuracy of the story.
"Perhaps the real solution to this would have been for Mr Grant's publicists to say to the media … they would be grateful if journalists desist," she adds.
Hartley continues: "I think if you are going to make allegations … it should come as no surprise when those are very robustly defended."
Lord Justice Leveson stops Jay from asking whether Hartley is "too close" to her client. Leveson says he will make his own mind up, before Jay swiftly moves on.
Hartley is asked about a statement in which Daily Mail publisher Associated Newspapers attacked Hugh Grant's evidence to the Leveson inquiry. It claimed "Mr Grant's allegations are mendacious smears driven by his hatred of the media".
Hartley says it was the response of the Daily Mail to "serious allegations" made by Hugh Grant during his evidence.
"The draft was contributed to a number of people, including the editor-in-chief [Paul Dacre]," she says.
Hartley says Dacre is out of the country, but her view is that the Mail would "stand by" the "mendacious smear" line.
She adds that the Mail had already been in communication with Grant and the Hacked Off campaign prior to his evidence.
"I think if you're going to make a serious allegation and leading a campaign against the media you would and should take care over what you are saying," says Hartley.
Robert Jay QC, counsel to the inquiry, asks Hartley about a supplementary statement in her written evidence.
Jay say it contains "a lot of hearsay", but we do not know what exactly he is referring to.
Hartley says she helped collate evidence from various people within the Mail.
Four representatives from the newspaper group went to the ICO's headquarters in Cheshire to look at the evidence in August. They were MoS managing editor John Wellington, MoS deputy editor Ted Verity and two lawyers.
Hartley says that Wellington is a "man of great integrity" and would not have sent him to the ICO's office if she thought he would try to conceal the evidence in any way.
Jay asks Hartley if she received any reports during the process of the inquiry. Hartley says she received a series of notes but nothing more.
Robert Jay QC asks Hartley about the Information Commissioner's Office's Operation Motorman investigation.
Hartley says the meeting between the ICO and the Mail was in July 2011. Before July last year the ICO was not making available the evidence from its inquiry to journalists, she says.
Hartley says she cannot recall one occasion when her advice has been ignored or overruled.
Now onto "inquiry agents", Hartley says the Mail has two databases in its library for searches about people's family histories.
"We don't use private investigators or inquiry agents," Hartley adds.
Associated has conducted enquiries into Raoul Simons, a former sports reporter who was last year arrested under the Met police's Operation Motorman investigation into phone hacking. These enquiries found that Mulcaire was a contact of Simons, but found no payments made from Simons to Mulcaire.
The Mail searched its own financial records last summer.
Hartley says the search was for payments made to Glenn Mulcaire or anyone associated with phone hacking. It found no payments to any of those people. This is a continuing process, Hartley says.
Hartley notes that key journalists at the Mail group have denied knowledge of phone hacking in interviews with legal staff and the managing editor.
Leveson inquiry: Liz Hartley
Liz Hartley, manager of editorial legal services at Daily Mail publisher Associated Newspapers, has taken the stand. She will be the final witness of the day.
The BBC's Ross Hawkins has just tweeted:
So no questions at all on the Hugh Grant plummy voice woman story (on which MoS was required to withdraw "mendacious" comment on Grant)
Wright has now finished giving evidence.
Wright says the PCC receives up to 5,000 complaints a year.
Lord Justice Leveson asks how many of these are ruled inadmissable, for example becuase they are from third parties.
Wright says that the majority of complainants are happy with the outcome. He points out that after the PCC received a flood of complaints from third parties over Jan Moir's comments about Stephen Gately in the Daily Mail, the watchdog asked the star's family if they wished to complain.
Dan Sabbagh has just tweeted:
Leveson unimpressed by Wright's efforts to say that self regulation needs industry experts sitting as regulators.
Wright says there are "strong indications that all the major publishers will joined a reformed PCC". He says he is not sure how to get Private Eye to join in a collective body, and can see why not being a part of it could be seen as a selling point.
He denies that the PCC is "too cosy" and that argument is based on a false assumption. Editors are often harder on other editors than the lay commissioners of the PCC are, he tells Leveson.
Wright says it is clear to him that "what the phone hacking episode showed is that the PCC under its existing constitution didn't have means of dealing with systematic problems … it was and is a complaints body."
The PCC did ask News International whether it went beyond Clive Goodman; they assured the PCC it didn't; we [the PCC] didn't have a proper means of testing whether there was any substance to that assurance.
He suggests a "standards and compliance" arm that would be able to call editors to give evidence and impose sanctions.
Briefly back to the chronology of Operation Motorman.
Charges were brought against Whittamore in February 2004 – the same month Wright warned his staff to take care when employing his services, Robert Jay QC points out.
Wright confirms that the Mail on Sunday did use Whittamore "in a small number of cases" after the investigator had been charged. "The use of him became much less frequent after February 2004," he says.
Wright says his priority is to "secure the future of the newspaper in a very very difficult environment".
He mentions the ability of technology to turn great papers into "struggling businesses".
"My main task will be to find ways of ensuring the pool of talent … continues to exist and we can continue to produce the sort of journalism I want to produce," he says.
Wright says that in his 38-year career in journalism he has never had a grander ambition than to produce the best possible paper for the greatest number of readers.
"You should always be the voice of people whose lives are affected by those in power but not in power themselves," he says, adding that the Mail on Sunday is "different from other papers".
He notes that the Mail on Sunday nearly folded in the first six weeks of publication 30 years ago. Now it is the biggest-selling Sunday title.
Wright is asked about his relationship with politicians. He says he usually goes to two of three of the party conferences, but other than that rarely goes to dinner with politicians.
"I try to keep the paper independent of all parties … and certainly not get into bed with certain politicians," he says.
Wright says he sent a very experienced former Observer journalist, David Rose, to Portugal to do a "cold" review of the story.
The journalist filed an investigation into one of the police officers in charge of finding McCann, noting that the officer had worked on a similar case before and had faced allegations he forced an admission from a parent of the missing child.
Wright is asked about the Mail on Sunday's coverage of the Madeleine McCann case.
He ia also sked what he made of Daily Express's coverage of the disappearance of McCann.
"They gave it a great deal of coverage – more than I thought was warranted. I'm sure they'll be able to explain why to you."
Wright says three stories in the past year brought noticable increases in circulation and traffic: the royal wedding, the Japanese tsunami, and the M5 crash.
His point is that none of these stories were exclusive.
The inquiry has resumed with Peter Wright giving evidence.
Here is a lunchtime summary of today's evidence so far:
• Peter Wright, editor of the Mail on Sunday, says he was "uncomfortable" to learn his journalists had used private investigator Steve Whittamore.
• The Mail on Sunday paid Whittamore a total of £20,000 to trace information on people, Wright tells Leveson.
• Wright says the Mail on Sunday still sanctions cash payments; the biggest in recent years was £3,500.
• Paul Silva, picture editor of Daily Mail, calls for training for freelance photographers.
The inquiry has now broken for lunch, after which Peter Wright will resume giving evidence.
Wright says that Mandelson did not pursue his PCC complaint, but may revive it following his evidence today.
Robert Jay QC moves on to a story about Lord Mandelson buying an £8m house. Mandelson argued that as he was no longer in politics there was no public interest in the story being published.
"I think there's a public interest in knowing how somebody who until a year previously had been a government minister on a generous, but not over-generous, salary was able to afford such a house," Wright says.
He adds the story was obtained by proper means, from a member of the public who quoted the £8m price – which he says Mandelson did not query.
Wright is asked about the Lord Triesman story on bribery and the football World Cup.
Jay asks Wright why it was necessary to mention an alleged relationship between Lord Triesman and a woman in the story.
"The simple logic of the story demanded why Lord Triesman was in a restaurant with a woman 30 years younger than him with someone not in his employ discussing matters [relating to the World Cup]," Wright says.
He says the story was "absolutely" in the public interest.
Wright says in his statement that payments have been made to public officials.
He describes the recipients of these payments as mostly "people in the armed forces who have been party to something that has happened in a war zone which they think needs to be brought in public attention".
Wright says he rebuked his managing editor over the cost of employing Whittamore.
He denies that there was a "cover-up" and says his managing editor "simply didn't alert me" to the activities of Whittamore. "I don't think it occurred to anybody that he might be doing illegal things," Wright says.
"He's not somebody who deliberately hides things from me. He's somebody who sometimes doesn't mention things to me because there's a possible risk in them," he says.
Wright will not agree that the timing of the visit to the ICO was prompted by the commencement of the Leveson inquiry.
Wright mentions "something of a learning process in this period" and the influx of new technology. He says reporters were adapting to new technology "more rapidly than editors knew they were doing so".
"Rightly or wrongly, it took us a while to catch up with what had been taking place," Wright says.
Wright says he and Daily Mail editor-in-chief Paul Dacre sent people to the Information Commissioner's Office to look at the data behind the reports late last year.
He thinks the offer to go to the ICO came from the Society of Editors, but is not entirely sure.
Leveson intervenes. "Something was going on in your newsroom which you clearly hadn't been aware of … but that something was going on you clearly might try to get to grips with it," he puts to Wright.
Wright says that's why he issued an instruction to stop using Whittamore.
He adds the Mail was "expressly refused" permission to see the evidence behind the Operation Motorman report by the ICO, but "overall we accepted the findings".
What Price Privacy Now? was the key ICO report into the unlawful trading of confidential information published in 2006.
The Daily Mail was identified as the paper with the the most transactions followed by the Sunday People, the Daily Mirror and the News of the World.
The nature of the transactions was not identified in this report and could have included general research and legal searches such as electoral roll checks or searches of births, deaths and marriages records.
What Price Privacy Now? table. Source: ICO
"You have to apply a rule of proportionally in these things," Wright says.
He adds: "I was concerned for the good reputation and functionality of the paper going forward … I was aware that by the time What Price Privacy came out [there had been prosecutions]. I did not see the need to go over ground they had gone over themselves."
We were acting in a way that would not put our staff at any risk of prosecution, Wright tells Leveson.
Mail on Sunday staff commissioned criminal records checks from Whittamore, Jay says. Wright says he wasn't aware of that until August 2011.
Jay asks whether Wright could have checked whether his journalists were asking Whittamore for unlawful information.
"Why would I go and look for something which hadn't been suggested to me?" Wright replies.
Jay asks: "By 2006, when the ICO report was published, you could see what was going on?"
Wright replies: "By this time we had effectively stopped using Mr Whittamore two years previously."
Jay asks Wright why the Mail on Sunday carried on using Whittamore even after the investigator had been arrested.
"I know our action dated from the point we became aware Whittamore was going to be prosecuted … It was around the turn of the year 2003/04. In February that year [2004] we took steps to stop use of Whittamore or restrict use to when … there was a legitimate reason to do it," he says.
Jay asks why he did not take steps to identify journalists using Whittamore.
Wright says: "I thought the most important thing to do at that stage was to ensure … What had happened in the past had happened. You talk about illegal inquiries, but there is also a public interest defence... I was concerned, it had become apparent that we were dealing with someone who was acting in ways which we were not entirely aware."
He adds he hopes that there would be a public interest defence for his paper's use of Whittamore.
Wright said he issued instructions in February 2004 that Whittamore should be used carefully. Whittamore was arrested in March 2003.
"From that point onwards, Whittamore wasn't really used," he says. "We stopped using him altogether in September 2004. Apart from two payments which no one can explain."
He says use of Whittamore "virtually stopped altogether" in September 2004.
The payments were classed as "payments for taxis and accommodation", Jay says.
"That was administratively how they'd been classed - I don't think there was any attempt to conceal them," says Wright.
Wright says when he found out about Whittamore he instructed staff to take "enormous care" when using Whittamore.
Wright says that at the time he knew that "a number of reporters used [Whittamore]". He doesn't really know an accurate figure.
"His main use to us and the reason our newsdesk had been keen to use him was that at this point in time a lot of information that previously you had had to laboriously go to Somerset House, or town halls where electoral registers were kept, he had on databases," Wright tells Leveson. He adds that reporters at the time had laptops but no internet access.
Wright says he was alarmed when he heard of the police investigation into the Bob Crow story.
Wright says Whittamore's invoices were "very vague" and confirms that "substantial sums" (Jay's phrase) were paid to him.
"It seemed to me we were asking him to do things that should have been done by reporters themselves," Wright says.
Wright says the Mail on Sunday paid Whittamore about £20,000 over the entire period he was used.
Jay asks Wright again about payments. Wright says he "rebuked" his managing editor John Wellington "for failing to alert me to the practice of employing inquiry agents".
Wright says when he took over as editor he set up a system to get a weekly update on editorial payments - to journalists, photographers - which is where overspend was mostly accruing.
"Payments to Mr Whittamore, because he wasn't a journalist, fell into that category, which I didn't have personal control over," he says.
Wright says he found out in August 2011 that Whittamore did provide information illicitly to some journalists.
"I asked whether we were regularly using this man and I was told that we were," Wright tells Leveson. "I was uncomfortable that it appeared he might be using methods of which we would not approve, without the knowledge of those who were commissioning him."
In 2004, Wright issued an instruction to staff not to use Whittamore "unless there was an extremely good reason and all other means had been exhausted".
Wright says he doesn't know "who, if anyone" at the Mail on Sunday asked Whittamore for this information. "It's a reasonable assumption that they did, but we don't know."
Asked about Whittamore, Wright says reporters would ring him up and ask him to find information about a certain individual "but he didn't offer stories".
Wright says he never spoke to Whittamore.
Wright is now being asked about inquiry agents and the information commissioner's Operation Motorman report in 2003 and 2004.
He says he heard about Motorman after he was told that police were looking into a Mail on Sunday story about the union leader Bob Crow.
Private investigator Steve Whittamore's logbooks noted that he had supplied the name of the owner of a scooter used by Bob Crow to the Mail on Sunday.
"I think we had the story … but we didn't know who the motor scooter belonged to, and then Whittamore supplied that information."
He says that the name of the owner of the scooter was included in the story.
Wright adds: "Whittamore didn't supply stories. He was used primarily to find names and addresses of people we needed to speak to in the course of researching stories."
Wright is asked if cash payments are made to sources at the Mail on Sunday.
"In certain circumstances," he replies.
He says he believes the biggest cash payment in the past five years was £3,500.
Wright adds the top payment for a "major interview" or book serialisation in the last year was £50,000.
Asked how much the MoS paid the woman for a story relating to Lord Triesman, Wright says it would have been something "in that order", of £50,000.
Wright says that there can be an assumption on newsdesks that newspapers are looking for certain stories.
He will sometimes tell the Mail on Sunday newsdesk to approach stories "with an open mind".
Particularly since the phone-hacking scandal, Wright says he will want to know "what means were used to obtain the information in the first place".
Wright says he doesn't believe journalists at the Mail on Sunday were involved in voicemail interception.
"I have absolutely no evidence that phone hacking ever did occur. I would hope that if phone hacking were going on it would have come to my attention."
Wright says that he will endeavour to find out who anonymous sources are in stories, in case of any retribution.
"The source may have their own agenda," he says. "If I'm going to make a judgment on a story I need to know where it's coming from."
He also wants to know whether the source will be willing to give evidence if story is challenged.
Wright says "yes, but not always" when asked if he generally follows the advice of lawyers.
On a Friday and Saturday, duty lawyers will read every single story in the paper, he says. Sometimes they are overcautious and "in particular on celebrity stories" there are certain individuals who are likely to sue for libel.
"It's their job to point out the risk; it's my job to take the decision," Wright says. Sometimes he will take a more cautious view than the duty lawyers.
Wright is asked about sourcing and attribution.
He says he would not have a problem running a story on one anonymous story if the source is the subject of the story themselves. He says this often happens with politicians.
Wright says he is "not completely happy" with the phrase "prior notification", adding the newsroom term is "putting it to" the subject.
He says it is the Mail on Sunday's policy to put a story to the person before it is published, and it would usually do this with "anything contentious".
Within the past few months the Mail on Sunday has introduced a corrections and clarifications column on page 2, like its daily sister paper.
"I have to say I think it helps to correct things quickly," Wright tells Leveson.
He says in the first week the paper carried four of five corrections, but last week there was none. It varies from week to week, he says.
The wording is negotiated with the complainant if it is contentious, Wright says.
Previously, there was a debate about the prominence to be given to a correction, which delayed getting a correction in the newspaper, he tells Leveson, adding that complainants have been "happy to see it" in the new page 2 slot.
Wright prefers to settle complaints before they get to the PCC, he says.
The managing editor, John Wellington, will often get in touch with the complainant and the journalist and establish the "strength" of the complaint.
He says: "If we have simply got it wrong – which does happen – we publish a correction or clarification straight away."
The Mail on Sunday will always publish the correction in print, he says.
Editing a paper is not like hearing a case in the court of law, Wright tells Leveson. There is only partial information available and a judgment has to be made on Saturday afternoon.
"The full array of information on which you are going to make that judgment [whether to publish or not] you don't always have until that point," he says.
"If you are a newspaper or journalist you don't have the benefit of being able to question people under oath," he says, adding that subjects will often dodge questions or avoid giving full and truthful answers.
Wright is explaining the difference between daily and Sunday newspapers.
He says Sunday titles have more time to investigate stories and "you are looking for stories that the daily papers won't cover and haven't covered but will set the agenda for the following week."
The job of a Sunday editor is "more what you don't put in, what you don't select," he says.
"You are looking for stories that the daily papers haven't covered, won't cover," he adds. "You are looking for stories that will set the agenda for the coming week."
The Mail on Sunday is a large and successful newspaper, he says, hence he has been in the editor's chair since 1998.
He says the Mail group is making money but that it is "becoming more difficult".
Mail Online has its own editor but takes some Mail on Sunday content, he confirms.
"We've a very very broad church newspaper," he says of the Mail on Sunday. "We want to publish groundbreaking exclusive stories. But readers buy us for many other things."
Wright is asked how the culture has changed since he first joined the Daily Mail group in the late 1970s.
The subject matter of what newspapers cover has "changed enormously", he says. Previously the industrial correspondents were the star reporters – now most national papers don't employ industrial correspondents.
He says that TV channels have created a large number of people who claim celebrity status and are covered "in much the same way as" sports stars or film stars.
Peter Wright, editor of the Mail on Sunday, has taken the stand.
Silva has now finished giving evidence and the inquiry is taking a short break.
Asked if he has any recommendations, he says the PCC and NPA should get involved were there another situation like the McCanns.
"If you take the McCann situation, if we are unfortuately in that situation again, an organisation like the PCC should be stepping in."
He suggests a PCC training scheme for freelance photographers "where they're aware of their responsibilities".
Silva is being asked why the paper's normal policy on pictures of children did not apply to the McCanns.
"It was the most intense story I've ever worked on," he says. "One of the most difficult I've ever had to work with."
Silva says that most pictures used of the McCanns were from outside agencies, rather than Daily Mail photographers.
He adds all of the photographs used would have been approved by the McCanns' press officer, Clarence Mitchell.
He admits the paper used unblurred pictures of the McCanns' children. "This was a unique situation … where we'd been allowed to stand in a certain position … and take pictures of the children," he says.
Silva says he understands the point that using the pictures was against the Mail's general policy.
Jays asks whether he should not have used the pictures.
"In hindsight, possibly … but there was no objection raised at the time," he adds.
Silva is questioned about Kate and Gerry McCann.
Jay asks why the Mail did not wait for the green light from Grant before sending a photographer to his house.
Silva says he just didn't: "That's the way we've done it for years."
Gerry and Kate McCann. Photograph: Lefteris Pitarakis/AP
He says he did not ask the photographer whether Grant had given his consent to have his picture taken outside his house.
He adds that he "probably wasn't surprised" when Grant kicked up a fuss about the pictures, but insists that the actor gave his implicit consent for the pictures to be taken.
"No, I wasn't surprised, given the buildup of photographers [over the next couple of days]," he adds.
Jay presses Silva on whether the Hugh Grant case was a naturally private occasion, therefore out of bounds.
When asked if it was obvious that Hugh Grant wouldn't have wanted photographers outside the house given his dealings with the press, Silva replies: "No."
Jay responds: "Is that really your answer, Mr Silva?"
Silva confirms that it is.
"The whole thing was brought into the public domain," Silva says, adding that an agent confirmed the birth of the child following a press release issued by a US magazine.
"There was no inclination in that statement that there was a privacy problem or a problem ahead," Silva says.
"A story breaks, we then go to their home, we ask them to pose up, if they say no we'll move on and go away."
Asked why he sent photographers to Hong's house following the birth of the child, Silva says: "It was a major showbiz story of great interest to our readers."
He adds it was to get a "posed-up picture" of the family and that this case is no different to what they've done in the past, citing David Cameron and David Jason after the birth of their respective children.
"In an ideal world it would have been nice if Hugh issued a picture … We didn't have to take it ourselves … It means it's such a nice picture it just brightens things up [in the paper]."
Silva is asked about recent photographs of Hugh Grant and the mother of his child, Ting Lan Hong.
Hugh Grant. Photograph: Oli Scarff/Getty Images
Silva says there is "no reason, no justification" to publish photographs of Pippa Middleton going about her business in the street since the royal wedding.
He adds that there's no justification to print pictures of "her just coming out of her door every day".
Silva says Mail Online "should apply the same standards" as the Daily Mail newspaper.
"The guidelines are given out to my photographers," he adds.
Jay says there is clearly a distinction between staff photographers and freelancers.
He is then asked about photographs of Liam Fox, the defence secretary who resigned.
Silva defends the pictures, saying they're in the public interest and were taken in a public street.
Jay asks Silva about pictures on Mail Online of Sandra Bullock and her son in a park.
"I'd have to see the picture. We wouldn't put it in the paper... But I don't know the circumstances so I can't really comment," says Silva.
"What's disturbing about these photographs is that the faces of the children haven't been pixellated ... would you like to see the pictures?" says Jay.
Silva says he doesn't know the circumstances around the Mail Online pictures. "All the questions I've listed would all be asked in relation to those pictures," Silva says, if they were being considered for the newspaper.
On a picture of Bullock trying to shield her child from photographers, he says: "If that was a British celebrity taken in a British park we'd be asking a lot of questions, yes."
Robert Jay QC asks Silva about photographs on Mail Online. He says he only deals with pictures for the newspaper.
Jay asks about a picture on Mail Online today of picture of Simon Cowell on his yacht, and whether that would be a private place. Jay says the pictures is from Matrixpictures.co.uk. which Silva describes as "one of the paparazzi agencies".
Silva says he hasn't seen the picture as he was off-desk yesterday preparing for the inquiry.
Silva says the Daily Mail will avoid pictures of celebrities if they are engaged in legal action with the paper.
He says the Mail is more interested in Kate Winslet than Sienna Miller, because of the brand and readership of the paper.
Silva says that "as a family man" he would agree – and comply – with celebrities who do not wish their children to be photographed.
Leveson says he is reluctant to make suggestions, but adds: "If those in the public eye and do not court publicity wish to protect themselves and their privacy they should be able to go to somebody and say 'I'm just not interested in any of this'... In the normal run of situations they should just be left alone."
"Yes, I would agree with that," says Silva.
The Daily Mail is very careful about using photographs of celebrities' children, Silva says, and will crop or blur images if necessary.
Asked if there is an argument that the photographers should not be taking those pictures at all, if the children's faces are later blurred, Silva says: "Possibly, yes."
In terms of pictures of celebrities on holiday, Silva says celebs are fair game on public beaches or in a public place, but not in hotel grounds or other private property.
"The main principle is 'is it a public beach or a public place' where they are on holiday," he says.
Robert Jay QC asks Silva whether it is right that some celebrities go to certain restaurants in the hope of being photographed.
"I believe so, yes," Silva replies.
Silva says he started asking picture agencies a number of questions – on issues such as harassment, media scrums, the type of lens used – three or four years ago. "When I started 20 years ago I don't think we asked any questions."
"Times have changed and we've had to change accordingly," he says. "We've reacted to the change in the culture at the moment."
Long-lens cameras can take pictures from a distance equivalent to the length of a football pitch, says Silva.
A number of celebrities – including JK Rowling and Sienna Miller – specifically complained about long-lens cameras when they gave evidence to the inquiry before Christmas.
Leveson inquiry: Sienna Miller. Photograph: Lefteris Pitarakis/AP
If a photographer has been following a celebrity all day long, they will have to justify that, says Silva. But not if they have been there "two minutes".
"There would have to be a special reason for them being there that long, for that period of time," he says.
Robert Jay QC asks Silva how he would discover whether a celebrity has been harassed when a photograph was taken.
Silva says he looks at the demeanor of the person in the picture. If a celebrity looks uneasy or harassed in a photograph he will ask the picture agency for their take on events. There are "various indicators" of whether a celebrity is harassed, he says.
Silva says that if a celebrity is on a public street they are fair game – even if it's a matter of yards from their home, which is private.
Silva says he cannot recall a complaint about photographs taken of celebrities leaving their house to get in their car on a public street.
Lord Justice Leveson questions Silva on what he says are the "rather arbitrary" distinctions between public and private places in the PCC code, relating to where celebrities can be photographed outside their home. Silva says that the pavement is a public place – where celebrities can be legitimately photographed – but not their driveway.
"We are only talking about a matter of yards," Silva says.
Silva says there have been "a handful" of complaints by celebrities over the past few years.
The Daily Mail receives about 30,000 pictures a day from agencies all over the world, including paparazzi photographers. Silva describes paparazzi photographers as freelancers who are not attached to a particular newspaper.
Paul Silva, picture editor of the Daily Mail, is the first witness of the day.
Leveson inquiry: Paul Silva
Robert Jay QC, counsel to the inquiry, confirms that the Daily Mail editor, Paul Dacre, was unavailable to give evidence today but will appear on 6 February.
Leveson goes on to rebuke Kelvin MacKenzie, who he says questioned the credibility of a witness (likely to be Anne Diamond) when he appeared before the inquiry on Monday.
"He should not have done so," says Leveson. "I think his evidence was rather more of opinion than fact, but that's as far as it goes."
Lord Justice Leveson is addressing press coverage of his comments at the inquiry yesterday on the future of press reform.
[These comments] have been reported as emerging findings. They are not in fact that. I am testing possibilities. One of the ways of doing so is asking those who are likely to be affected for their views … I wouldn't like it to be reported that I have reached conclusions, because I have not.
Paul Silva, the picture editor of the Daily Mail, appears to be the first surprise witness of the day.
The Guardian's Lisa O'Carroll has just tweeted:
Unexpected witness up first. Paul silva the veteran picture editor at the daily mail.
Could there be a surprise addition to today's Leveson inquiry lineup?
Ben Fenton, the FT's media reporter, has just tweeted:
Could there be a surprise(ie unscheduled) witness at #leveson today? Just seen Richard Wallace, D Mirror ed, sitting between lawyers in Ct73
Both Wright and Hartley are likely to be asked how the Mail on Sunday came to accuse Hugh Grant of "mendacious smears" following his evidence in November.
Grant suggested that the Mail on Sunday must have intercepted his voicemail in order to obtain information about an alleged relationship between the actor and a "plummy-voiced" woman based in the US.
The Mail on Sunday swiftly rejected Grant's claims, saying that the information came from a source close to Jemima Khan, a former partner of Grant. Lord Justice Leveson said he was concerned about the tone of the Mail on Sunday's statement, which read: "Mail on Sunday utterly refutes Hugh Grant's claim that they got any story as a result of phone hacking. In fact in the case of the story Mr Grant refers to the information came from a freelance journalist who had been told by a source who was regularly speaking to Jemima Khan. Mr Grant's allegations are mendacious smears driven by his hatred of the media."
Welcome to the Leveson inquiry liveblog.
Peter Wright, editor of the Mail on Sunday, will give evidence on the third day of a week devoted to newspapers.
Wright has been editor of the Daily Mail's sister paper since 1998. A long-serving employee of publisher Associated Newspapers, Wright previously served as Paul Dacre's deputy at the Daily Mail and as editor of that paper's Femail section. Wright is widely tipped to take over Dacre when he relinquishes his editorship of the Daily Mail.
The Mail on Sunday benefited along with rival tabloids from the closure of the market-leading News of the World in July, inheriting its mantle of the biggest-selling Sunday paper. After an initial boost of more than 320,000 copies in July, Wright's paper slipped backed to an average weekly sale of about 2m, less than 100,000 above where it was at in June 2011, and about 200,000 ahead of the Sunday Mirror.
Liz Hartley, head of editorial legal services at Associated Newspapers, the publisher behind Daily Mail and Mail on Sunday, will also give evidence.
The inquiry will publish written evidence from Kevin Beatty, managing director of Associated Newspapers, and James Welsh, finance director of the publisher.
Join us from 10am for live coverage.
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