"Public interest" in this context is not the same thing as "the interest of the public". The former is a fairly objective (though difficult to measure) thing which concerns itself with the welfare of the populace [1]. This is historically what was meant by "public interest," though the newer meaning of "whatever interests the public" has muddied the meaning of the phrase somewhat.

[1] http://dictionary.reference.com/browse/public+interest

There's two different meanings of interest at play here. Certainly much of the public is interested in gossip, and enjoys being titillated by it. But it does not have an interest in that information in the sense that it will be worse off for not knowing.

Agreed. Public interest is a very difficult to define - Snowden vs Celebrate gossip etc. I was being looking for a distraction and was doing a bit of a thought experiment :)

It's not about what the public want but what they need.

That's mostly accurate, but not completely. British criminal legislation often includes explicit defence arguments - 'It is a defence that...' followed by a specific action, belief, or circumstance.

The phone hacking law (RIPA) doesn't include that option.

But the ultimate authority in British Crown Court trials is the jury, and if a lawyer can persuade a jury that a public interest defence is valid, that will swing a trial.

Most of the phone hacking cases couldn't argue public interest because there wasn't any - it was random information gathering that could be useful in news stories and (allegedly) in other ways.

There was no equivalent of the Profumo Scandal of the 60s, which would surely have counted as a public interest case.

(Which is not to say equivalent scandals weren't found, but that if they were the press never revealed them.)