Express Newspapers could be expelled from the newspaper industry's self-regulatory body, the Press Complaints Commission.
Tim Bowdler, chairman of the Press Standards Board of Finance (Pressbof) – which funds the PCC - told MPs today that Express Newspapers may be excluded if it did not patch up its quarrel with the Newspaper Publisher's Association.
In December, Express Newspapers left the NPA, the trade body for national newspapers, in a row over unpaid fees.
Part of the NPA's subscription revenue goes to Pressbof, and in turn the PCC, which means Express Newspapers is not paying for the commission.
Bowdler told the House of Commons media select committee today he was in constant dialogue with Express Newspapers proprietor Richard Desmond to try to resolve the dispute.
He said: "I have not given up, and I still think it is possible they will recognise it would be advantageous for them to return - but in the end they will have to understand what the implications will be if they do not do so.
"I think in at some point in time Presbof might say to the PCC... that it may well be they should not continue to adjudicate indefinitely."
Bowdler said that, if the PCC decided to stop adjudicating complaints about Express Newspapers, those titles would face additional costs as complainants would have no choice but to go to the courts.
PCC chairman Sir Christopher Meyer told MPs that, with the approval of the editors, the commission continued to adjudicate on complaints about Express Newspapers titles.
Select committee chairman John Whittingdale told Meyer and Bowdler that if this happened it would undermine self-regulation of the press.
Bowdler said: "I think it would be a terrible mistake to suggest the system itself is undermined irreparably by the fact there is one rogue publisher."
But Meyer admitted: "This is a problem that needs to be fixed and it is for the industry to fix it."
He said the Daily Mirror had withdrawn from the PCC but had returned. 'It is not unprecedented but it does need to be dealt with," he said.
'Everyone is doing more for less'
Earlier in the hearing, Jeff Edwards, chairman of the Crime Reporters' Association and former Daily Mirror crime correspondent, said the huge cutbacks being made by news organisations was having an effect on standards.
He said everybody in newspapers was doing more for less, adding: "The end product is a lower standard of product."
Edwards and Sean O'Neill, crime and security editor of The Times, assured MPs the PCC's code of conduct was taken seriously.
O'Neill said the PCC's code was part of his contract of employment. "If I breached that I can lose my job," he said.