A committee of MPs and peers will examine the granting of super injunctions as Ryan Giggs was named in the Commons as the footballer who obtained a gagging order.
Yesterday afternoon Dominic Grieve, the attorney general, told MPs that the government believes freedom of speech was a "corner stone" of Britain's democracy.
"Plainly however, there are also occasions when an individual is entitled to have their privacy protected," he said.
"There is a balance to be struck and this is reflected in our existing legal framework.
"The government recognises the importance of finding the correct balance between individual rights to privacy on the one hand and rights to freedom of expression and transparency of official information on the other."
Grieve said a joint committee made up of MPs would be established to examine that balance and would report back in the autumn.
The so-called super injunctions prevent newspapers from reporting the fact that they have been gagged as well as reporting on the substance of any allegations.
Grieve was responding to an Urgent Question from Conservative MP John Whittingdale who chairs the culture, media and sport select committee.
Whittingdale welcomed the creation of a committee but warned that developments were "moving very rapidly" and told Grieve that he would "virtually having to be living in an igloo not to know the identity of at least one premier league footballer" who had been granted an injunction.
"The actions by thousands of people of posting details of this on Twitter are in danger of making the law look an ass," he said.
But Whittingdale's careful wording of his question was undone by Lib Dem John Hemming, who revealed the Premier League footballer's identity.
He said: "With about 75,000 people having named Ryan Giggs on Twitter, it is obviously impracticable to imprison them all."
Hemming was told off by the Speaker who said "occasions such as this are occasions for raising the issues of the principles involved not seeking to flout for whatever purpose."
The Lib Dem, who has previously revealed details of super injunctions using the protection of parliamentary privilege, was also criticised by Labour's Chuka Umunna.
Umunna said MPs should "exercise extreme caution" when breaching the orders when they were "not fully appraised" of the reasons why they had been granted.
The effectiveness of the gagging orders has been undermined by the internet as people have exposed individuals alleged to have taken out the inunctions on Twitter.
Much of the recent furore has centred on a footballer who is said to have taken out an injunction to block reports that he had an affair with former Big Brother contestant Imogen Thomas.
As well as being named by numerous people online his identity was revealed on the front page of Scotland's Sunday Herald, which is not covered by English law, and has now been identified in the Commons chamber.
This morning the prime minister said it was "unsustainable" and "unfair" on the press that they were banned from reporting information that "everyone else is clearly talking about" as it had been revealed on the internet.
"The law and the practice has got to catch up with how people consume media today," he told ITV.
Ed Miliband has also said that the issuing of super injunctions needed to be examined as social networking meant the gagging orders could be easily circumvented.
"I don't think that is a good position to be in when the law is not working. Parliament does need to look at this," he told Sky News
Lawyers for the Sun newspaper twice failed in their attempts to have the injunction overturned by the High Court.
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