Labour MP Harriet Harman says the three major political parties have thrashed out a deal on Britain's new press watchdog.

Harman broke the news to the BBC after the three major parties were locked in talks throughout Sunday night, reportedly lasting more than five hours.

According to Harman, the vote scheduled to take place in Parliament on the remit and structure of the new watchdog will not now go ahead.

Labour leader Ed Miliband and Deputy Prime Minister Nick Clegg had earlier lobbied for the watchdog to have statutory backing, while Prime Minister David Cameron opposed the proposal.

Cameron, who appeared to be heading for a defeat in the House of Commons, had earlier met Clegg to extend talks on striking a last-minute deal. His efforts came following pressure built by newspaper groups, including the owners of the Sun and the Daily Mail, which reportedly threatened to boycott the proposed watchdog and form their own body.

Meanwhile, a senior Labour source told the Independent before the talks: "We are in lock-step with the Lib Dems on this. Ed Miliband spoke to Nick Clegg twice before Nick spoke to David Cameron and once after. We are clear we are not going to accept their royal charter. Any agreement must be on the basis of our royal charter."

"Labour has been trying to push through a tough form of statutory regulation for the press with really unacceptable consequences for freedom of speech in this country. I think their climb-down from that position has put them much closer to our position and I think that is to be welcomed," Culture Secretary Maria Miller told Sky News. The remarks have been dismissed by Labour.

Another observer familiar with the matter told the Guardian: "It is like a game of poker. On Tuesday, the prime minister called their bluff. Then, at the weekend, when they published their royal charter and seemed to revert to their earlier position, they folded their hand."