Critics of the government’s flagship internet regulation policy are warning it could lead to a North Korean-style censorship regime, where regulators decide which websites Britons are allowed to visit, because of how broad the proposals are.

The mooted legislation, launched on Monday in the online harms white paper, covers any website that “allows users to share or discover user-generated content, or interact with each other online”, a definition which potentially covers vast areas of the internet.

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As well as social media companies and discussion forums, any site with comment sections, crowdsourced reviews or individual user profile pages falls under that definition, encompassing everything from online news sites to video game stores.

The regulation imposes a duty of care on affected sites, holding them liable for restricting “behaviours which are harmful but not necessarily illegal”. A site that does not fulfil its duty of care could be fined, its senior managers held criminally liable or the regulator could demand the site be blocked entirely.

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The proposed rules, and the creation of a regulator to enforce them, are part of a wide-ranging series of recommendations that attempt to tackle the spread of material related to terrorism, child abuse, self-harm and suicide on the internet.

The white paper, unveiled on Monday, comes following growing pressure on the government to act in the wake of the death of teenager Molly Russell, whose father believed that exposure to images of self-harm on social media was a factor in her taking her own life.

But critics from across the political spectrum have warned the legislation could also threaten freedom of speech. Jim Killock, the executive director of the Open Rights Group, said: “The government’s proposals would create state regulation of the speech of millions of British citizens. We have to expect that the duty of care will end up widely drawn, with serious implications for legal content that is deemed potentially risky, whether it really is nor not.”

On Monday, government ministers sought to reassure critics. Sajid Javid, the home secretary, said: “Press freedom is absolutely sacrosanct in this country” and that “there is nothing in this white paper that challenges that in any way whatsoever”.

Quick guide Online harms white paper Show Hide What is being proposed? A regulator will be tasked with ensuring online companies meet a new "duty of care" to their users. That regulator, which may be a new body, or a pre-existing organisation such as Ofcom given new powers, would have the power to issue significant fines against technology companies it finds in breach. For serious harms, or for repeat offenders, it can go further still, and hold individual managers criminally liable, or even demand the site be blocked in the UK.

Who welcomes it? Damian Collins, the chair of the Commons DCMS committee, said he was pleased to see "that the social media companies should have a legal liability to take down harmful content hosted on their platforms". The NSPCC, which was consulted on the white paper, called it "a hugely significant commitment by the government". The charity's CEO, Peter Wanless, said: "For too long social networks have failed to prioritise children’s safety and left them exposed to grooming, abuse, and harmful content. So it’s high time they were forced to act through this legally binding duty to protect children, backed up with hefty punishments if they fail to do so." Why is it controversial? Internet blocking is always a hot button issue, even when it's for harms as serious as online terror or child abuse. But the white paper contains several specific proposals that have left free speech campaigners deeply concerned.

One is the fact that the white paper explicitly addresses not only illegal content, but also content which is "legal but harmful". By requiring online companies to block that content anyway, campaigners argue, the government is outsourcing decisions that should be made by parliament to, at best, an unaccountable regulator, and at worst, the very internet companies that are supposed to be controlled by the legislation. What's been left out? There are plenty of online harms that haven't been addressed by the white paper. Little was said about electoral malpractice, for instance: there was no mention of overhauling electoral regulations, something the Electoral Commission first said should be done 15 years ago. Sajid Javid, the home secretary, promised that the Cabinet Office was doing work on that area, and that "not too long from now you'll be hearing about it."

Others noted how limited the legislation was in addressing a multitude of misogynist harm online: "cyber flashing", "revenge porn", and online stalking were all notable by their absence.

Earlier, Jeremy Wright, the culture secretary, promised the government’s plans to regulate online harms would not descend into “North Korean-style censorship”, even though the government was planning to introduce new powers to allow regulators to block companies from operating in the UK.

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Facebook Twitter Pinterest The culture secretary, Jeremy Wright, said powers to block websites operating in the UK were an important last resort. Photograph: Will Oliver/EPA

Wright said powers to block websites were an important part of the legislation. “If everything else fails,” Wright said, “we will look at simply denying the opportunity for some of these websites to operate in the UK.

“That is a power that is available elsewhere. It is technically feasible to do it. It is not without problems, I should make that clear. But I think it is right at this stage for the government to set out a full range of penalties, up to and including that one, because we need those companies, which are large, global companies … to take this regulator seriously.”

Others said the legislation might not even have its desired effect of reining in the large tech companies. Dom Hallas, the executive director of the Coalition for a Digital Economy, which represents the UK’s startup industry, said: “These plans will entrench the tech giants, not punish them.

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“The vast scope of the proposals means they cover not just social media but virtually the entire internet – from file sharing to newspaper comment sections. Those most impacted will not be the tech giants the government claims they are targeting, but everyone else. It will benefit the largest platforms with the resources and legal might to comply, and restrict the ability of British startups to compete fairly.

“There is a reason that Mark Zuckerberg has called for more regulation. It is in Facebook’s business interest.”

But some of the social media companies think the regulation could be counterproductive. One industry source said: “This legislation stems from a perception that west coast technology companies have alien and unaccountable power that they wield in the UK. But relocating that power to an unelected, unaccountable regulator would be just as problematic, or worse.

“Parliament is where decisions that affect free speech should be made. The government is declaring some speech ‘legal but harmful’, and giving very vague definitions of what that speech is. On issues such as cyberbullying and trolling, there’s almost no detail.”