Robert Jay, QC, counsel to the inquiry, said the files showed the Daily Mail had paid £500 ($950) for the details of 10 "friends and family" of the subject of one of its stories. Dacre argued such searches were necessary to "corroborate" news stories.
During three-and-a-half hours of evidence, he was forced to listen to repeated criticisms of his newspaper.
He was most clearly offended when Jay suggested the Daily Mail had campaigned for the family of murdered teenager Stephen Lawrence only because the victim's father had once done plastering work at his house.
"Are you really telling me that I would risk going to jail, risk destroying my career, I would put my proprietor and my paper in that position, and that I couldn't take a principled stand against something I felt very strongly, and that was only because this man at some stage many years previously had done some plastering work for me?" Dacre asked. "I really do find that insulting."
He also stood by his organisation for accusing Hugh Grant of a "mendacious smear", after the actor claimed the Daily Mail and the Mail on Sunday had been involved in phone hacking. "I have never placed a story in the Daily Mail as a result of phone hacking, that I know came from phone hacking."
Earlier, he called for a new system of accrediting journalists. He said they should run the risk of having their press cards removed in the way doctors are subject to being struck off.
"I do believe there is an opportunity to build on the existing haphazard press card system. There are 17 bodies at the moment providing these cards. By transforming it into an essential kitemark for ethical and proper journalism, the key would be to make the cards available only to members of print news-gathering organisations or magazines who have signed up to the new body and its code.
"The public at large would know the journalists carrying such cards are bona fide operators, committed to a set of standards and a body to whom complaints can be made."
- Independent
