Secrets of the story hunters: Are investigative journalists so high-minded?

The world's most famous investigative reporter is a brave but fallible hack with a record in exposing economic corruption, whose string of lovers includes a girl with a dragon tattoo. Unfortunately for journalism, Mikael Blomkvist is a figment of the imagination of novelist Stieg Larsson, creator of the bestselling Millennium trilogy.

If Blomkvist was hired in Britain, he'd be contending with the tightened purse strings of his news organisation, the red pen of an increasingly fearful legal advisor, the firefighting of a growing PR industry, and a public that has a shrinking attention span and is wary of press sensationalism.

One of Britain's most experienced investigative journalists, Paul Lashmar, estimates that the number of serious operators in this highly specialised and often lonely discipline has fallen from around 150 during the Eighties to fewer than 90 today.

"It's harder and harder to get money to do stuff," he says. "The people doing investigative journalism are much more likely to be freelance nowadays, and more likely to do other things as well – working for risk analysis companies or as corporate investigators. This is a really tough time." Lashmar, who has worked for The Independent, The Observer and ITV's World in Action and now lectures in journalism at Brunel University, makes an exception for his gloomy thesis. "There's clearly a huge amount of money available to people doing investigations if their targets are celebrities. But whether this is moral, ethical or in the public interest is often extremely in doubt," he says. "A lot of the best investigative journalists are working for tabloids, looking at celebrities."

Mazher Mahmood, the News of the World's fake sheikh, is Britain's most prominent investigative reporter, the man behind the recent exposé of the Pakistani cricket-fixing scandal. But the Sunday tabloid's successes have been marred by concerns over the methods some of its journalists may have used to obtain information. A queue of high-profile figures from sport, entertainment and politics has formed to take legal action against the News of the World's publishers over claims that mobile-phone messages were illegally intercepted (there is no suggestion that Mr Mahmood has been involved in such activity). The subject is due to be examined by the House of Commons Committee on Standards and Privileges. "In the public's mind, most people will equate the current climate of investigative journalism with muckraking, sex, celebrities and hounding people," says Rosie Waterhouse, another leading investigative reporter. "Serious public-interest publications and broadcasters must make the distinction, and keep spelling out that we want to investigate matters in the public interest, not necessarily what interests the public."

Waterhouse, who runs an MA course in Investigative Journalism at City University, London, is encouraged by her students' appetite for public-interest investigations. Part of that enthusiasm reflects the early successes of City University's Bureau of Investigative Journalism, which was set up with funding from the philanthropists David and Elaine Potter and has a team of between 20 and 25 journalists working on six current investigations. The bureau's recent exposé of public-sector pay – revealing that 38,000 public servants earn more than £100,000 a year – was a joint project with the BBC's Panorama and made the front pages of The Daily Telegraph and the Daily Mail. It took seven months and involved a team of 10.

"Very few organisations would have the capacity and man hours to do that investigation" which involved numerous Freedom of Information requests, says Iain Overton, the bureau's managing editor. The bureau has partnered with Al Jazeera International and the British Medical Journal in investigating the global pharmaceutical industry, and joined with The Guardian in highlighting the maltreatment of dissidents in Iran. Overton, who was previously with Channel 4 News, says: "These are relatively dry [subjects]. They're not trying to catch a footballer sleeping with a prostitute; they are hard, time-consuming investigations." Lashmar points out that charities and NGOs are doing their own investigative journalism. He praises the work of the Campaign Against the Arms Trade and the death-row charity Reprieve in doing work that previously would have been done by reporters. "These campaigning groups, which used to supply a bit of information to journalists, are now supplying entire investigations."

Meanwhile the mainstream media is decreasingly active in the specialism. "Many editors are frightened stiff of publishing material that could either lead to you being injuncted or sued," says the former New Statesman editor John Kampfner, who as chief executive of Index on Censorship has campaigned against Britain's strict libel laws. "The general modus operandi is 'safety first', which is bad for journalism and terrible for democracy."

Tim Luckhurst, a former editor of The Scotsman and professor of journalism at the University of Kent, says the availability to libel lawyers of no-win, no-fee agreements, along with the rise of the super-injunction banning all reporting of a subject, has "gravely hampered" serious investigative journalism. Indeed, many "investigations" are nothing of the sort, he argues. "I'm really sick to death of programmes that masquerade as investigative journalism when what they are really doing is telling stories about health, crime etc which are not in any way concealed. I think broadcast investigation is falling short of its obligation to hold power to account."

That view is challenged by Dorothy Byrne, head of news and current affairs at Channel 4. The channel's Dispatches strand was behind "Politicians for Hire", where it partnered with The Sunday Times in the lobbying exposé involving Geoff Hoon and other politicians. According to Byrne, investigative journalists are now under suffocating pressure from the lawyers and PRs employed by the big organisations that they are seeking to scrutinise. "What has changed dramatically is the amount of time we have to spend dealing with attempts by companies and organisations to weaken the programmes we put out before we put them out. Several have employed two firms of solicitors against us," she says. "We don't allow it to intimidate us, but imagine how it feels when you're sitting at your desk and the third 15-page letter of the day arrives."

Tom Mangold, the veteran BBC investigative journalist, highlights the need to keep serious programmes entertaining. "People have a much shorter attention span. They are not as happy to absorb the minutiae and the detail of investigative journalism," he says. "I even find that myself, sometimes I read a good investigative piece and I think, 'Can I really get to the end of this extremely long story?'" He acknowledges that it is "terribly expensive" to hire an investigations specialist who will contribute only three or four stories a year. He is concerned that broadcasters, to save costs, are "parachuting" well-known reporters "into stories that have been effectively researched by students and amateurs".

One investigative news outlet that continues to thrive is Private Eye, which on 2 November hosts its annual award ceremony in memory of that great proponent of the discipline Paul Foot. The Eye's deputy editor Francis Wheen recalls how Foot arrived at the office one day shouting, "Got the bastard at last!" . A businessman he had investigated three decades earlier at last faced prosecution. "Paul triumphantly wrote up his 'I told you so' piece: 'As the Eye revealed in 1969...'"

Wheen argues that the satirical magazine's approach to investigations is exactly the opposite of the prevailing trend for sound-bite journalism. "We have an absurdly long attention span," he says. "We do bang on about things and run umpteen instalments and updates." Private Eye's buoyant circulation shows there remains a public appetite for investigative reporting.

The adventures of Mikael Blomqvist have made the late Stieg Larsson one of the most read authors in the world. "Blomqvist is a slightly seedy figure, but is basically a decent guy," who relentlessly digs out the dirt, says Lashmar. "People like reading about him, but sadly not enough of them are supporting the places that encourage his kind of investigative journalism."