Tonight Mathew...good points well made so I'll answer your points and then we'll put it to bed.
a) IMHO the govt. actually want such issues suppressed right now because they have realised that the BNP have upped things politically and are garnering votes as a result. The simplistic "nasty, violent people" isn't generally peoples' experience, which is why they get votes and even more votes when it kicks off. Even Searchlight et al have moderated their angles on such things recently.
The problem is that such stories do massive damage to local relations; local politics; attracting money for regeneration and so on but smaller places (like Wakefield where my mate is a sub-editor and another friend lives) don't have the political nous and clout to suppress. The feeling locally there is that it would have been better to suppress and the damage from that one story could take ten years to sort.
b) the mechanism is not rocket science. You have senior media, politicians and police in one place and you just agree the line. It's what happens with things like the football hooliganism I gave as an example. Public witnesses have nowhere to go because the regional local papers get their stories locally and the one that would cover central Manchester is the MEN.
I have already spoken to my mate at the MEN and he confirms that the story is known and is not going to be published because too many people have made clear the consequences if it is.
c) On the Welsh thing - I agree there is no agenda as such but I, and many like me, profoundly disagree that such bias is not institutionalised. It's the very definition of institutionalised.
... and so to bed.