The source stressed that ministers would "study closely" the ruling of the Court of Appeal and then debate whether there is a need to redress the balance between privacy and free speech.
"The balance between privacy and free speech is clearly wrong. If this is what the law says then it needs to change. It feels like we have had judge-invented law. It draws on laws passed by parliament but it is not what parliament ever intended and we should correct that. The judges have created a privacy law which parliament never voted for. MPs never agreed a privacy law because they knew it would be used by the rich and famous to cover up their misdeeds", the insider told the Daily Mail.
"We will study the implications of the judgment carefully", said a No 10 spokesman. "You have heard the prime minister say before that a free press is one of the cornerstones of any democracy, and this government recognises the vital role that newspapers and the media play in holding people to account and shining a light on the issues which matter".
Rift With Father and Court Battle Against ANL
He said he did this in order to improve his image, as previously the media had published photos of him doing menial tasks. He admitted to having lied about the photoshoot to the couple, telling them he had no agreement with the tabloid. Soon after the rift, Thomas Markle suffered a heart attack and missed his daughter's wedding. Since then, Mr Markle has repeatedly criticised his daughter and his son-in law in the media.
Three months after the solemn ceremony, Meghan Markle wrote a letter to her father in which she bemoaned his behaviour and called on him to stop attacking the couple. Thomas Markle later leaked the letter to the Daily Mail, because he wanted to address what he described as unfair media accounts about him.
"Your actions have broken my heart into a million pieces not simply because you have manufactured such unnecessary and unwarranted pain, but by making the choice to not tell the truth as you are puppeteered in this. Please allow us to live our lives in peace. Please stop lying, please stop creating so much pain, please stop exploiting my relationship with my husband", Meghan Markle wrote to her estranged father.
Associated Newspapers Limited, however, appealed the verdict after it obtained evidence from Meghan Markle's former communications secretary, Jason Knauf, who said that prior to sending the letter to Thomas Markle the royal showed him the draft, writing: "Obviously everything I have drafted is with the understanding that it could be leaked so I have been meticulous in my word choice, but please do let me know if anything stands out for you as a liability".
Jason Knauf also stated that Meghan Markle reportedly asked him whether she should address Thomas Markle as "daddy", adding that "in the unfortunate event that it leaked, it would pull at the heartstrings".
During the three-day appeal hearing last month, ANL's lawyer, Andrew Caldecott, insisted that the previous verdict should be overturned, arguing that Meghan Markle wrote the letter "with public consumption in mind".
"We read the judgment as implicitly accepting that the letter was crafted as an intimate communication for her father's eyes only. The fundamental point turns out to be false on the new evidence. The letter was crafted specifically with the potential of public consumption in mind because the claimant appreciated Mr Markle might disclose it to the media", Mr Caldecott said.
"The Court of Appeal upheld the judge's decision that the Duchess had a reasonable expectation of privacy in the contents of the letter and those contents were personal, private and not matters of legitimate public interest", the judgment read.
ANL said it was disappointed with the verdict and said it intends to appeal it in the Supreme Court. Meghan Markle described the ruling as a victory for not only for herself, but "for anyone who has ever felt scared to stand up for what's right". She also called on people not to be intimated by an industry that profits "from the lies and pain that they create".
"In the nearly three years since this began, I have been patient in the face of deception, intimidation, and calculated attacks The courts have held the defendant to account and my hope is that we all begin to do the same. Because as far removed as it may seem from your personal life, it's not. Tomorrow it could be you. These harmful practices don't happen once in a blue moon - they are a daily fail that divide us and we all deserve better", Meghan Markle wrote.