Halliday & Matthiessen (2004: 462):
In quoting, the projected element has independent status; it is thus more immediate and lifelike, and this effect is enhanced by the orientation of the deixis, which is that of drama not that of narrative. Quoting is particularly associated with certain narrative registers, fictional and personal; it is used not only for sayings but also for thoughts, including not only first-person thoughts … but also third-person thoughts projected by an omniscient narrator … . Reporting, on the other hand, presents the projected element as dependent. It still gives some indication of mood, but in a form which precludes it from functioning as a move in an exchange. And the speaker makes no claim to be abiding by the wording.