A political lobbying firm secretly paying journalists for articles favourable to its clients is facing calls to reveal full details of the payments, after the practice was denounced as a dangerous “attack on democracy”.

MPs, senior lobbyists and transparency campaigners all condemned the behaviour of CT Group, the firm co-founded by the campaign strategist Lynton Crosby, an election guru previously hired by both David Cameron and Boris Johnson.

There were calls for an overhaul of lobbying rules and demands for CT Group to reveal the full extent of the practice, exposed after a four-month Guardian investigation.

“Lobbyists paying journalists to produce apparently independent articles is an attack on the ethics of journalism, public relations and, indeed, on democracy,” said Alastair McCapra, the chief executive of the Chartered Institute of Public Relations. CT Group is not a member of the body.

“Anyone can practise public relations in this country without belonging to a professional body or answering to a code of conduct. The majority do that ethically but these reported practices undermine our profession and erode the credibility on which responsible lobbying and public relations depend.”

Lobbyists for CT Group told an undercover reporter they had paid journalists to place apparently independent stories in newspapers.

They also offered hundreds of pounds in cash incentives to do the same for a property industry client and said that in return for the payment, CT Group would have increased editorial control.

Jemimah Steinfeld, the chief executive of Index on Censorship, said: “To spin what is lobbying as journalism is shortsighted and frankly dangerous.”

She called on CT Group to launch an internal investigation.

Steve Goodrich, the head of research and investigations at Transparency International UK, said: “When lobbyists secretly pay journalists to write favourable coverage for their clients, it undermines the integrity of the press. This investigation raises serious questions about the conduct of CT Group, and about how widespread these hidden arrangements are across the lobbying industry.”

Luke Taylor, a Liberal Democrat member of parliament’s public administration and constitutional affairs committee, said there should now be “full transparency on when money has changed hands when it comes to reporting”.

“Across the board we are seeing worrying signs of our democracy being in peril,” he said. “A truly free press is a fundamental pillar of a healthy democracy and so we must do everything in our power to maintain it.”

Rupa Huq, a Labour member of the Commons media select committee, said: “We need more transparency in lobbying which almost feels like the wild west, such is the lack of regulation.” She added: “I hope the new Andy Burnham government can grip this issue.”

The Guardian began investigating the arrangements after CT Group approached a freelance journalist and offered to pay him to pitch a piece to a British national newspaper about problems caused for the housebuilding industry by the Building Safety Regulator, set up in the wake of the Grenfell Tower fire that killed 72 people.

CT Group is a £40m-a-year turnover lobbying company whose recent clients include the tobacco company Philip Morris and the owner of the football club Manchester City.

In a statement, CT Group said: “We do not comment publicly on work we do for clients and we therefore cannot respond to the specific allegations you have made.”

It said the events had been “deliberately mischaracterised” and said it did not engage the undercover journalist to do anything and did not pay him anything. It said the journalist was looking for work and “chased us relentlessly over a period of more than six months”.

The investigation has also raised concerns about the vulnerability of freelance journalism, which can often feature irregular and low-paying work.

“If reporters are being paid to place stories in papers by private companies this breaches the essential buffer zone between lobbying and journalism,” said Martin Bright, a senior lecturer in journalism at the University of Essex.

“The market is very tough for freelance journalists in the present media climate. They should never be exploited in this way.”