Halliday & Matthiessen (1999: 521-2):
Similarly in a projecting relationship, the two elements in a verbal projection are typically equal in status, while those of a mental projection are unequal. This is not surprising: since you can hear what a person says, you give the wording the full status of a direct experience, as in Mary said, "I will wait here for you tomorrow"; whereas you cannot observe what a person thinks, so this is more likely to be construed as dependent on the process that projects it, as in Mary thought/ decided she would wait there for him the next day.In the first, the deictic standpoint is that of the sayer, namely Mary; what she said is quoted as "direct speech". In the second, the deictic standpoint is that of the person speaking; what Mary thought is reported as "indirect thought". Again, it is always possible to report speech — and even to quote thought, with the speaker acting as an omniscient narrator; but those combinations are less favoured in everyday English discourse.