Here's a little example of what I call Flat Earth News. In June 2005, Fleet Street told its readers about a gang of feral child bullies who had attempted to murder a five-year-old boy by hanging him from a tree; the boy had managed to free himself. This story was not true. Indeed, it was obviously not true from the moment it started running. There was the commonsense problem that even a fully grown man with 10 years of SAS training who found himself hanging by the neck would have the greatest difficulty in reaching up and lifting his entire body weight with one hand while using the other to remove the noose. How would a five-year-old boy do it?

More than that, there was the evidence in the story itself. From the first day, the police refused to say the boy had been hanged. The parents and neighbours, who told the press how shocked they were, never claimed to know what had happened. The one and only line on which the whole story was built was a quote from the boy's adult cousin, who said he had told her: "Some boys and girls have tied a rope around my neck and tried to tie me to a tree." That's "tie me to a tree", not "hang me from a tree".

It was a nasty case of bullying but not an attempted murder. A 12-year-old girl had put a rope around the boy's neck and led him round like a dog, pulling on it hard enough to leave marks on his neck. That was clearly dangerous. But the boy never claimed she had hanged him from a tree. Indeed, he never even claimed that she had tied him to a tree, only that she had tried to. To double check, we spoke to Professor Christopher Milroy, the Home Office pathologist who handled the case. He said: "He had not been hanged. That was not correct and I couldn't understand why the press were insisting that he was."

Nevertheless, the tabloids ran all over it; and TV and the rest of Fleet Street joined in. The London Evening Standard called it a lynching; the Mail, Guardian and Times ran headlines which stated boldly that the boy had been hanged; the Independent ran a moody feature about fear descending on the boy's estate. Sundry columnists joined in with solemn comment about the youth of today and the impact of violence on television.

The ingredients in this little story run routinely through a stream of other small stories, through stories as big as those about the Iraqi weapons of mass destruction, and then into a flood of media commentary that feeds into government policy and popular understanding - falsehood as profound as the idea that the Earth is flat, widely accepted as true to the point where it can feel like heresy to challenge it.

There never was a time when news media were perfect. Journalists have always worked with too little time and too little certainty; with interference from owners and governments; with laws that intimidate and inhibit the search for truth. But the evidence I found in researching my new book, Flat Earth News, suggests our tendency to recycle ignorance is far worse than it was.

I commissioned research from specialists at Cardiff University, who surveyed more than 2,000 UK news stories from the four quality dailies (Times, Telegraph, Guardian, Independent) and the Daily Mail. They found two striking things. First, when they tried to trace the origins of their "facts", they discovered that only 12% of the stories were wholly composed of material researched by reporters. With 8% of the stories, they just couldn't be sure. The remaining 80%, they found, were wholly, mainly or partially constructed from second-hand material, provided by news agencies and by the public relations industry. Second, when they looked for evidence that these "facts" had been thoroughly checked, they found this was happening in only 12% of the stories.

The implication of those two findings is truly alarming. Where once journalists were active gatherers of news, now they have generally become mere passive processors of unchecked, second-hand material, much of it contrived by PR to serve some political or commercial interest. Not journalists, but churnalists. An industry whose primary task is to filter out falsehood has become so vulnerable to manipulation that it is now involved in the mass production of falsehood, distortion and propaganda.

And the Cardiff researchers found one other key statistic that helps to explain why this has happened. For each of the 20 years from 1985, they dug out figures for the editorial staffing levels of all the Fleet Street publications and compared them with the amount of space they were filling. They discovered that the average Fleet Street journalist now is filling three times as much space as he or she was in 1985. In other words, as a crude average, they have only one-third of the time that they used to have to do their jobs. Generally, they don't find their own stories, or check their content, because they simply don't have the time.

Add that to all of the traditional limits on journalists' trying to find the truth, and you can see why the mass media generally are no longer a reliable source of information.

· Flat Earth News: An Award-winning Reporter Exposes Falsehood, Distortion and Propaganda in the Global Media is published this week

nick.davies@theguardian.com