Campbell appeared today before the Leveson inquiry into press ethics and standards. His written evidence had already been leaked by Paul Staines, the blogger Guido Fawkes, leading to him also being summoned to appear at the inquiry.
Campbell, who worked closely with Tony Blair during his time as prime minister, said that editors and journalists are now under "enormous pressure" to fill more pages, both off and online.
"In most of the newsrooms, there are fewer of them with more pages and online space to fill, and less time to do it. These are important factors, but they should not be excuses to let standards and ethics slip," he said.
Campbell said that British journalism could be the best and worst in the world, adding that this was the case "often in the same edition".
He recalled a time when a newspaper journalist called him to warn that they were running a story that he was "fed up" at Downing Street and was preparing to join Manchester United.
Campbell said: "I said it was completely untrue and his verbatim quote was, 'I know, but it's a good story'."
A report that caused him particular distress was published in the Daily Mail on his father's death, despite the fact that he was still alive at the time.
Campbell called the then Daily Mail editor Paul Dacre about the story. Dacre admitted that he "didn't have to leg to stand on" and paid a settlement, which was used to provide playground equipment at Campbell's children's school.
He said that a "very, very small number of people" have "frankly besmirched the name of every journalist in the country", and criticised the industry's "shift downmarket" amid fierce competition and the rise of celebrity magazines.
He agreed with former Daily Star reporter Richard Peppiatt, who gave evidence to the inquiry yesterday, that newspaper jobs had become predominantly office-bound.
"It's become a desk job and they sit there re-writing other newspapers' copy or agency copy - journalism as a craft, there are not many people doing it," said Campbell.
Campbell told Lord Leveson that he had been shown evidence by police that his name was among notes seized from Glenn Mulcaire, the private investigator jailed for phone hacking on behalf of the News of the World in 2007.
He also confirmed that Carole Caplin, the former personal assistant to Cherie Blair, told him she was targeted by Mulcaire between 2001 to 2003. Caplin has further told Campbell that she would be happy to appear at the Leveson inquiry.
In his witness statement, the former spin doctor alleged that a story about Cherie Blair's pregnancy, published by the The Mirror in 1999, could have come from information obtained via phone hacking.
Speaking today at the inquiry, he said that he had been visited by officers from Operation Tuleta, the police investigation into allegations of computer hacking on behalf of the News of the World.
He also claimed to have seen invoices suggesting that The Mirror may have paid private investigators to look into him, along with a member of his family and the former Labour minister Peter Mandelson.
Campbell said that private investigators previously acted almost as freelance journalists, presenting ready-prepared stories to newspapers, with few editors questioning the methods used to obtain them.
He said that people like Mulcaire had made a huge amount of money from selling stories to newspapers based on phone hacking.
Campbell said that he did not have any specific evidence that the Daily Mail hacked into anyone's phone, but he added: "All I will say is that in relation to all of us who were in government at that time, all sorts of stuff got out.
"You'd just sit there scratching your head thinking how did that get out? Given what we know now I have revised my opinion in several regards as to how stuff may have got out."
Campbell said that the Press Complaints Commission has "failed" as a regulator for the media, because it is a "body that's been of the press and for the press". But he feels that getting regulation of the press right now could have positive benefits for the future of online media.
"If you get the newspaper regulation right, I think that will have an impact on the internet as it develops," he said.
"There may come a point where you have to apply some standards that can apply to the internet as well. It surely won't be that long until there's a defamation case over something that is said on Twitter. Get that right and some of the other stuff ought to fall into place."
Leveson Inquiry coverage roundup:
> JK Rowling criticises 'threatening' press treatment
> Harry Potter newspaper articles criticised by JK Rowling
> Sienna Miller 'baffled and intimidated' by press intrusion
> Madeleine McCann parents Kate and Gerry 'violated' by press intrusion
> Phone hacking goes beyond News of the World, says lawyer
> Steve Coogan: Newspaper industry is like the mafia
> Phone hacking made Dowler family think Milly was alive
> Hugh Grant suspects Mail On Sunday of phone hacking
> Charlotte Church offered coverage deal to sing at Rupert Murdoch wedding
> News of the World defends Milly Dowler phone hacking