The two-year jail sentence for people who steal or sell personal information was in the draft of the Criminal Justice and Immigration Bill until just days ago, when two House of Lords amendments were tabled by a Government minister.
The change to the proposed law would stop the prison sentence threat coming into force but retain it as an inactive part of the law. The amended law would allow the Justice Secretary to ask Parliament to activate that clause in the future.
The Information Commissioner Richard Thomas has argued for the past two years that a prison sentence must be created for people who steal and trade in personal information.
The Information Commissioner's Office (ICO) produced a report in 2006 called What Price Privacy Now?, which revealed that most major newspapers had engaged in the buying of information from just one raided investigations agency. The ICO published the names of the newspapers involved, and the list included broadsheet titles such as The Observer and The Sunday Times as well as red top tabloids.
Thomas called for jail terms for data thieves and traders and the Government backed that call until last week.
Junior justice minister Lord Hunt of Kings Heath had two amendments to the Bill accepted in the House of Lords making the changes.
The ICO said that it was at least happy that the clause containing the jail threat – clause 76 – was not abandoned altogether.
"Although of course we would have preferred the clause to have remained unchanged, we understand that the Justice Secretary will be able to introduce prison sentences if illegal activity continues," said an ICO statement. "Our aim has always been to deter and this will now be a powerful Sword of Damocles hanging over the heads of anyone involved in obtaining personal data."
The ICO said, though, that the Government's reliance on fines instead of jail threats was unlikely to be successful.
"The prospect of unlimited fines has not deterred people from engaging in the illegal market in personal information," it said. "The Government had recognised that a custodial sentence was needed to deter those who steal data. The Information Commissioner is pleased that the government has apparently resisted substantial pressure to abandon clause 76."
The second of Lord Hunt's clauses introduced a public interest defence to clause 55 of the Data Protection Act, giving journalists a defence if their obtaining, disclosing or procuring of information could be justified as being in the public interest.
Media groups have been lobbying the Government in recent weeks not to introduce the jail term, and the Information Commissioner released a statement last week urging the Government to stand by its proposals.
There are other ways in which journalists can land in jail, though. Last year News Of The World royal reporter Clive Goodman was jailed for four months after admitting to hacking into the mobile phone voicemail of royal employees.
Goodman was found guilty of offences under anti-bugging law the Regulation of Investigatory Powers Act (RIPA).