We are in the middle of a liberal berserker, one of those demented moments when "progressives" run riot and smash the liberties they are meant to defend. Inspired by Lord Justice Leveson, they are prepared in Parliament tomorrow to sacrifice freedom of speech, freedom of the press and fair trials. They are prepared to allow every oppressive dictatorship on the planet to say: "We're only following the British example" when outsiders and their own wretched citizens protest.

Try warning them that one day they and this country will regret their hooliganism and they reply in the sing-song voice of a child in a playground: "Well, that's what Murdoch and Dacre want you to say." It's no good pointing out that Murdoch and Dacre are tired old men from a dying newspaper industry and they will not be keeping us company for much longer. Nor can you quote Orwell's words to the effect that just because a rightwing newspaper says something does not mean it is wrong. Nothing works.

The Labour and Liberal Democrat parties are custodians of the best of Britain's radical traditions: the traditions not only of Orwell, but of John Milton, John Stuart Mill and the men and women who struggled against the Stamp Acts and the blasphemy and seditious libel laws. Their successors are not worthy to follow in their footsteps. For the sake of a brief partisan victory, for the chance to shout: "Yah boo sucks" at the hated tabloids, they are inviting political regulation of the press at a time when the web revolution allows not only newspapers but also large blogs and the websites of campaign groups to be "significant news publishers", to use the ominously vague phrase Labour and the Liberal Democrats are offering to the Commons tomorrow.

You can see the falling away from fundamental principles in the degeneration of Hacked Off. This once worthy organisation began by making the sensible point that compliant police officers were allowing reporters and editors to escape justice. Now, ploce have arrested more than 60 journalists, so many that London is running out of specialist solicitors who can represent them. Instead of maintaining the principle of one law for all, Hacked Off and its supporters want a special press law, even though no one can define what "the press" is any longer.

I worked with Brian Cathcart when he was a priggish, lower-middle manager on the Independent on Sunday. He moved on to become a journalism lecturer at Kingston University and I hoped he might find happiness there. I never suspected that he would turn into a suburban Mussolini and warn that Hacked Off will bring parliamentary business to a halt unless its demands are met.

If you think that comparison is harsh, look at the Hacked Off website. It has no democratic structures, no means by which its supporters can hold the hierarchy to account. It is not only Cathcart who has lost his bearings in this heady atmosphere. I admired his Hacked Off colleague Evan Harris when he was a Liberal Democrat MP and we shared platforms to argue for libel reform. My respect went after he and Hacked Off refused to protest as the Labour and Liberal Democrat parties decided that if the price of pushing Leveson through was killing Harris's libel reform baby, they would pay it.

Speaking of murdered infants, Hugh Grant dismissed those who warned him "not to throw the baby out with the bath water" with one of his celebrated shrugs. "I have always said I don't think it is that difficult to tell what is bath water and what is a baby," he said. "To most people, it is pretty obvious." It does not seem so obvious today and libel reform is not the only screaming child hurtling headfirst towards the pavement.

There is nothing wrong with an arbitration service to settle disputes about contentious speech. But a compulsory arbitration service is an oxymoron. It is state licensing of publishing. Leveson wants that but never dared say so because every autocratic regime since the invention of movable type has wanted it too. Instead, Leveson said that publishers that do not register with his quango would face exemplary damages in the courts if they lost. The Labour party wants to say that even if a publisher is successful in court it will have to pay "all the costs of proceedings". Even if you win, you lose.

Think of that and then think of the web revolution. I hope you can remember it, because it seems to have passed the learned Lord Justice Leveson by. To take an example from the last decade, Teodorin Nguema Obiang Mangue, son of Teodoro Obiang Nguema Mbasogo, the president of Equatorial Guinea, sued Global Witness for running an investigative piece on its website into his family's lavish corruption. Could it face exemplary damages now? Leftwing blogs such as Left Foot Forward or their rightwing counterparts such as Conservative Home are as much news producers as the Observer – will they face them?

Lord Lester, who can often seem like the last liberal in England, says that the common law allows exemplary damages only in extraordinary circumstances. If they became a routine punishment to coerce writers into accepting state regulation, they would breach the commitment to fair trials in the Human Rights Act. So there goes another baby.

Incidentally, when Leveson started musing aloud about coercing compliance, it was not some knicker-sniffing tabloid he had in mind but Private Eye, one of the last homes of investigative journalism that's left. He followed up on that sinister performance by recommending that Parliament should allow the police access to journalists' sources at the earliest opportunity, a measure that would terrify whistle-blowers and kill investigative journalism stone dead – and, now I come to think of it, more babies too. Index on Censorship, English PEN and the Committee to Protect Journalists say that basic freedoms are in danger. Like a blustering tabloid columnist, Hacked Off says they are myth-making.

I bloody despair of the British liberal left sometimes. Did you not notice that Leveson hurt no one in power? That he didn't finish the career of Jeremy Hunt, even though the beggars in the street suspected that he had broken ministerial guidelines? That he did not lay a glove on David Cameron and that his criticism of Rupert Murdoch was so polite it allowed News Corp to retain control of BSkyB? Can you not see an establishment stitching up a winding sheet for our freedoms in front of your very eyes? Or doesn't it bother you as long as it upsets Paul Dacre?

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