Richard Desmond, owner of the Daily Express and Daily Star, said his newspapers were "scapegoated" for their coverage of Madeleine McCann's disappearance.

Mr Desmond told the Leveson Inquiry that his titles were "the only honest ones and straightforward ones" for the way they printed a front-page apology to the missing girl's parents and paid them £550,000 in a libel settlement.

He hit out at a former head of the Press Complaints Commission (PCC) for criticising Daily Express editor Peter Hill over the paper's reporting of the case in more than 100 articles.

"Every paper was doing the same thing, which is why every paper or most papers paid money to the McCanns. Only we were scapegoated by the ex-chairman of the PCC," he told the hearing at the high court in London.

Mr Desmond, who bought Express Newspapers in 2000, apologised to Kate and Gerry McCann, adding: "Nothing would give me greater pleasure than to find Madeleine."

But he told the inquiry into press standards that other newspapers also printed negative stories about the couple.

"At the end of the day all the others were doing the same, plus or minus, and basically I saw it as we were the only honest ones and straightforward ones," he said.

"We stood up and said 'Yes, we got it wrong, there's the money for the marketing fund, let's try and find Madeleine McCann, the poor little girl, let's put it on the front page and apologise properly'."

He added: "Yet the ex-chairman (of the PCC) and his cronies thought 'We'll hang out Peter Hill and the Daily Express'. They should have all stood up and said 'You know what, we've all wronged, let's all bung in £500,000 each'.

"If there were 102 articles on the McCanns, there were 38 bad ones but you could argue there were 65 or 70 good ones."

Mr Desmond suggested that the McCanns were content with his papers' extensive coverage of Madeleine's disappearance because it helped the search for the little girl.

"They were quite happy, as I understand, in articles being run about their poor daughter, because it kept it on the front page," he said.

Robert Jay QC, counsel to the inquiry, described this as a "grotesque" characterisation, adding: "Your paper was accusing the McCanns on occasion of having killed their daughter.

"Are you seriously saying that they were sitting there quite happy, rather than entirely anguished by your paper's bad behaviour?"

Mr Desmond replied: "I do apologise to the McCanns. I am very sorry for the thing and I am very sorry that we got it wrong."

Mr Hill told the inquiry the Daily Express ran stories suggesting the McCanns could be responsible for Madeleine's death because at the time "there was reason to believe" they might be true.

Asked about the decision to withdraw his titles from the PCC in January last year, Mr Desmond said the body was "a useless organisation" run by "people that hated our guts, that wanted us out of business".

But he again suggested that he could return to an industry regulator if it was composed of new PCC chairman Lord Hunt "surrounded by a couple of lawyers, surrounded by a couple of editorial grandees, not malicious people".

Mr Desmond described his friendship with Tony Blair and his feeling that he let down the former prime minister when Mr Hill switched the Daily Express's support to the Conservatives in 2005.

"I felt that I betrayed Tony as a mate. I felt he was a good bloke. I thought he was doing a good job, I liked him," he said.

The businessman was scathing about the phone-hacking scandal, telling the hearing: "It's ridiculous the amount of money, time, expense etc etc etc we're all putting in to look at this, that and the other, when these companies have committed criminal acts and should be prosecuted."

Mr Desmond said the only thing that attracted him to being a newspaper owner was the business opportunity and ruled out buying any other national titles.

Asked what interest he took in ethical constraints at his papers, he said: "Ethical? I don't quite know what the word means."

The media baron made a number of digs at his mid-market rival the Daily Mail, which he described as the "Daily Malicious" in a deliberate slip.

There was a moment of levity when Mr Jay accidentally called him "Mr Dacre" in a reference to the editor of the Daily Mail.

Clarence Mitchell, the McCanns' spokesman, said after the hearing: "The portrayal of his newspaper's coverage and the effect that it had on Kate and Gerry is not something that they or I recognise at all.

"The stories that we took issue with massively added to the stress and upset that Kate and Gerry were already suffering. They took the action they did reluctantly but in this case a line had to be drawn.

"The scale and weight of the inaccuracies and unfounded allegations meant that the Express group as a whole stood out as by far the worst offender and as a result the lawyers took a look at it and advised Kate and Gerry they had a very strong case and that's why the Express group settled as quickly as they did.

"For Mr Desmond to claim that Kate and Gerry were happy with the bulk of his newspaper's coverage, well, they weren't."

Prime Minister David Cameron set up the Leveson Inquiry last July in response to revelations that the News of the World commissioned a private detective to hack murdered schoolgirl Milly Dowler's phone after she disappeared in 2002.

The first part of the inquiry, sitting at the Royal Courts of Justice in London, is looking at the culture, practices and ethics of the Press in general and is due to produce a report by September.

The second part, examining the extent of unlawful activities by journalists, will not begin until detectives have completed their investigation into alleged phone hacking and corrupt payments to police, and any prosecutions have been concluded.