IF ANY STORY blind-sided me last year, it was the press campaign on behalf of the “NatWest Three”, a trio of unappealing and seemingly amoral alleged fraudsters who the Americans - takers of a tougher line on white-collar crime - wanted extradited from Britain.

Now, as a result of reading the new book on the state of the media by the investigative reporter Nick Davies, I know what happened. The PR company Bell Yard Communications did a Max Clifford for Postgrads operation, tailoring its arguments to the prejudices of various newspapers and media organisations: nationalism in The Daily Telegraph, anti- Americanism and civil libertarianism in The Guardian and The Independent. It worked.

That PR regularly subverts journalism is only one accusation that Davies, with the help of researchers from Cardiff University, makes stick. It is an unloveliness located, according to him, in the quick turnover, ultra-competitive world of “churnalism”, in which fewer and fewer journalists file more and more stories, engaging in what he describes as “the rapid repackaging of largely unchecked second-hand material”.

That's not all. Journalists, including some in the quality market, bribe policemen for information, invade data privacy even as they complain about government inability to protect it, and generally behave badly. They move in herds “recycling ignorance”, and usually exhibit what John Birt and Peter Jay defined as the “bias against understanding”.

In The Great Gatsby, published 80 years ago, Fitzgerald describes newspaper reports of his hero's murder as “grotesque, circumstantial, eager and untrue”. Nor is the modern picture quite as appalling as Davies suggests. The same CNN where you could find two female presenters clucking excitedly over the recent hospitalisation of Britney Spears, broadcast on the same day an enthralling two-hour debate - in prime time - between Barack Obama and Hillary Clinton.

Even so, I find Davies's case largely proved. But this makes his own sins the more ironic. For example, he buys without question into the lazy convention that the Hutton Report into the death of David Kelly was a whitewash, that Alastair Campbell's actions in criticising the BBC were a Mephistophelean “diversionary tactic”, and that Andrew Gilligan was some kind of martyr for the cause of truth.

Worse, though, is his chapter on The Observer and its editorial support for war in Iraq. Expressing extreme disquiet that “this flagship of the Left was towed along in the wake of a determinedly right-wing American Government”, Davies ascribes the newspaper's stance as being due to the absorption of misinformation from the intelligence services, a political naivete on the part of an easily flattered editor, and careerism on behalf of the political editor.

Whoever else he spoke to on The Observer who was there at the time, Davies didn't speak to me. Nor, I think, did he make the short journey up the stairs from The Guardian (for which he normally writes) to the offices of its Sunday stablemate. If he had done either, his attention might have been drawn to a photograph and a flower. They commemorated The Observer journalist Farzad Bazoft who, in 1990, was executed by Saddam Hussein, by way of a bloody two-fingered salute to Margaret Thatcher. The next Sunday The Observer carried an impassioned editorial on the consequences of appeasing dictators.

The paper's stance on removing Saddam was an absolutely natural continuation of that argument. But in the meantime it was Davies and company who had changed enough to feel stupefaction that anyone could think that ol' Saddam was worse than George Bush.

The news is worse than Davies, in this mostly indispensable book, imagines: even what he thinks is good, is bad.

Flat Earth News by Nick Davies
Chatto and Windus, £17.99

Times Recommends

• The Sunday Times 100 best holiday reads
• What will we be reading this summer: the booksellers predict
• Literary festivals: a survivor’s guide