If implemented, Section 40 would make members of a recognised press self-regulation scheme exempt from paying their opponents' legal costs, even if they lost a court case.
However, if publishers failed to join Impress - the state-approved regulator part-funded by Max Mosley - they would be forced to pay legal costs for writing true stories. So far, no major news outlet has joined Impress, with many campaigning heavily against such regulation.
Mark Wallace, former PR and executive editor at political blog ConservativeHome, who last week was embroiled in a Twitter spat on the subject with ex-England footballer Gary Lineker, said if section 40 were introduced, journalism would become tame, nervous and risk-averse.
"If that is allowed to happen, then we all lose out - 300 years of press freedom will be over, the public will never get to hear about scandals which deserve to be exposed, and PRs will find themselves stranded and purposeless, like sailors without a sea on which to float their ships," he said.
He added that a lack of interesting stories would mean no readers, and no readers would mean there was no point in clients employing a PR to persuade newspapers to publish things about them.
Francis Ingham, director general of the PRCA, labelled the spectre of section 40 as "offensive".
"The very idea that all of [independent press regulator] IPSO's 2,500 members would have to cover the costs of libel cases brought against them, even when the newspaper is successful, undermines fundamental legal principles," he said.
Meanwhile, James Hargrave, senior account director at PR firm JPB and vice-chair of the PRCA Media Relations Group, said a regulator could only succeed if it had the respect of the industry it sought to regulate.
"Section 40 seems a very punitive way to coerce the press into joining this new regulator, and would likely lead to more harm than good. It is clearly important that the press are accountable, but this measure does not seem a desirable feature of a healthy democracy," Hargrave said.
Jason MacKenzie, who was appointed president of the CIPR this month, told PRWeek section 40 represents a threat to free speech and freedom of expression.
"It is unnecessary, ill-conceived, and must be stopped," he said.
In November, the Department for Culture, Media & Sport and the Home Office launched a public consultation to address issues relating to press freedom and practices. That consultation, entitled Consultation on the Leveson Inquiry and its implementation, closed today (10 January).