The National Newspapers of Ireland (NNI) has called on the Minister for Justice to introduce legislation allowing journalists to protect their sources.
NNI says the granting of a right of qualified privilege to journalists would bring Ireland into line with other Western countries, where the media's role in detecting and exposing abuses of power was regarded as "fundamental".
The group's statement follows the news that Sunday Business Post journalist Barry O'Kelly could face imprisonment over his refusal to reveal to the planning tribunal his sources for two stories based on confidential documents from the inquiry.
The newspaper could also face a substantial fine if the High Court supports the tribunal's stance.
According to NNI, a form of qualified privilege which would afford "bona fide" journalists the right to decline to identify their sources was essential if media were to be able to investigate and comment upon matters of genuine public interest.
It said the insistence that journalists be required to reveal their sources was merely a "device" to dissuade those from coming forward.
"It is no more than a means of gagging journalists and their newspapers and can have no place in a free, modern and open democracy."
It said readers and ultimately "the community as a whole" would benefit.