BRITAIN'S first link up between a major TV, group and a newspaper publisher will follow the news yesterday that MAI and United Newspapers plan to fuse their media operations in a £3 billion sterling merger.

The deal is based on a relaxation of cross media ownership that the British government hopes to pass in its forthcoming Broadcasting Bill, seeking to eliminate restrictions on newspapers taking over television companies and vice versa.

The merger means that any aspirations that Independent Newspapers may have had to buy the Daily Express and Sunday Express titles have been frustrated.

There has been speculation for some time that a consortium including Independent and Sir Andrew Lloyd Webber's Really Useful Group might bid up to £200 million for the Express titles.

Analysts in the City of London expect a flood of similar mergers to follow if the law is passed in the autumn.

The deal brings together a number of powerful brand names in the British media, including the regional Anglia and Meridian TV channels controlled by MAI and the Express and Star newspapers owned by United.

United Newspapers chairman Lord Stevens pointed to the potential benefits of bringing together these titles in Britain's booming media industry.

"This merger brings together two companies, each of which is strong and well represented in its own media markets. Our businesses are complementary, and together will form a major force in one of the fastest growing sectors in the world," he said.

In a joint statement, the two companies said the merger would create a "major new international information and entertainments group with a broad spread of businesses in television, newspapers, advertising periodicals" and other interests.

They announced plans to "expand the merged group's businesses, both nationally and internationally", to "take advantage of the convergence now under way in the information and entertainment businesses".

They added that "improved financial performance" would result from the fusion of the two groups' management structures.

United Newspapers said it expected to report pre tax profit "of not less than" £138 million for the current financial year, compared with £138.2 million a year ago.

Meanwhile, MAI, headed by Lord Hollick, reported pre tax profits of £62.7 million for the six months to December 1995, compared with £58.6 million a year earlier.

To comply with present media law, the merged company will set up two subsidiary companies to hold all share capital in Express Newspapers, including the right wing Daily Express and Sunday Express tabloids.

As soon as the law allows, the merged group, whose name has not yet been decided, will buy back shares in the holding company and the Express titles will be wholly owned by the cross media group.

The financial markets welcomed news of the merger, with a jump in MAI shares of 71p to 450p, while shares in United Newspapers rose 18p to 642p.

Independent Newspapers is already involved in British national newspapers through its 44 per cent stake in the loss making Newspaper Publishing, publishers of the Independent and In dependent On Sunday.

Ownership of the Express titles would have represented a quantum jump for Independent, both in terms of the profits they generate and the prestige that national newspaper ownership brings.

At yesterday's joint press conference, Lord Stevens said "The titles were never put up for sale. Rumours were started in the Mail on Sunday, but no serious offer," was received," when asked about speculation that Sir Andrew Lloyd Webber and Independent had made attempts to buy Express Newspapers.

Independent already has close links with United Newspapers through their joint ownership of the highly successful Irish edition of The Star.