Kate McCann and her husband Gerry told Lord Leveson's inquiry today that they were left distraught by various suggestions in the press that they were responsible for Madeleine's death.
Gerry said that many of the stories produced about them were untruthful, sinister, or, in his belief, completely without basis.
He called for an investigation to be launched into how the News of the World got hold of the private diaries, and said that paparazzi photos of private individuals should never be published without first securing written consent.
Asked why he and his wife had agreed to give evidence, Gerry said: "We feel that a system has to be put in place to protect ordinary people from the damage that the media can cause by behaviour which falls far below what I would call acceptable."
Kate acknowledged that the media had been helpful in the early stages after their daughter Madeleine went missing aged 3 on holiday in Portugal in May 2007.
However, she soon started seeing more "negative" headlines seep into the press, which she said was "stopping their chances" of finding Madeleine.
The couple realised that there was a "tremendous amount of speculation" in the reporting, often stemming from articles published in the Portuguese press and picked up by British newspapers.
"They didn't know the source, they didn't know whether it was accurate, it was exaggerated and often downright untruthful and often, I believe, on occasions, made up," said Gerry.
He said that a Daily Mirror article, which bore the headline "She's dead", was "one of the most distressing headlines that was presented as factual... [but] taken from a supposition".
> Tabloid press accused of blackmail and intrusion
Kate told the inquiry that seeing details of her private diary in the News of the World had left her feeling "totally violated".
She added: "I'd written these words at the most difficult time of my life, most people don't have to go through something like that. It was my only way of communicating with Madeleine. It made me feel very vulnerable and small."
Discussing the "tens of journalists" that would camp outside their house in Rothley, Kate said that they would often "spring out from a hedge" so they could get a startled look from her and "attach 'frail' or 'fragile'" to the image.
Gerry told Lord Leveson that information is being published by the media that is resulting in lives "being harmed", and the "commercial imperative is not acceptable".
He called for a system to be imposed that means journalists who break the rules would "lose their privilege of practising".
Earlier, lawyer Mark Lewis alleged that the practice of phone hacking went beyond the News of the World, the News International paper shut down in July at the height of the scandal.