Watching the watchers

There's a rather rabid debate on Iain Dale's blog with regard to proposals for some kind of oversight body for blogs.
Getting away from the EU/Labour/Big Brother conspiracy theories which Dale's readers lapse into, I think the responses do miss a vital point: accountability.
Their answer seems to be, if you are traduced you can ignore it or sue. But bringing a libel action is notoriously expensive and ignoring it doesn't stop a libel being spread.
Blogging is not a level playing field however much gurus of web 2.0 might like to believe otherwise.