Independent Newspapers will assume full control of the London Independent next week in a deal which will cost the Irish group £30 million sterling.
The deal will realise the long-cherished dream of the Independent Newspapers chairman, Dr Tony O'Reilly, to become proprietor of a quality British daily newspaper.
Independent will pay a token £4 million to buy out the 54 per cent of Newspaper Publishing held by Mirror Group and the Spanish group, El Pais, but will also take over £26 million of debt.
While Independent will take over the management of the titles from the Mirror group, Mirror will retain a £3.7 million-a-year five-year contract to print and distribute the daily and Sunday titles.
The £30 million sterling cost of the buy-out of the Mirror and El Pais stake will increase Independent's spending on the group to £74 million sterling, with further heavy investment expected over the next two years.
So far, Independent has had absolutely no return on its investment, as the Independent has lurched from crisis to crisis. A price war by Mr Rupert Murdoch, owner of the Times, the Sunday Times, the Sun and the News of the World, has resulted in heavy falls in circulation at the In- dependent.
The difficulty facing Independent as sole proprietor is that the Independent is currently losing £500,000 a month, after losing an estimated £6 million in 1997 and £12 million the previous year.
A spokesman for Independent declined to comment on the negotiations, but it is understood that the deal is unlikely to be completed until the middle of next week.
It is also understood that Independent, as sole proprietor, is rehiring a former Independent editor, Mr Andrew Marr, in a senior editorial capacity.
Mr Marr resigned as editor earlier this year and was replaced as editor of the two titles by Ms Rosie Boycott, editor of the Independent on Sunday.
This was seen as reinforcing the Mirror influence on the newspaper and a move towards driving the titles downmarket in an effort to stem plunging circulation.
The change of editor is understood to have been strongly opposed by Independent News papers, which felt that maintaining and strengthening the upmarket image of the titles was the only way to return Newspaper Publishing to profitability.
Despite Ms Boycott's association with the move to drive the Independent downmarket, it is understood that she will remain editor of the two titles.
It is not clear where the returning Mr Marr will fit into the editorial structure, although some sources believe he will return as editor-in-chief with ultimate responsibility for both daily and Sunday titles.
Informed sources have said the Irish group plans to invest heavily in the editorial product, taking it back up market in an effort to attract back the lost readership.
Independent is understood to have a three-to-five-year timescale to bring the titles to profitability.
Last year a costly £12 million revamp and relaunch failed to stem the Independent's falling sales, and circulation is currently at 225,000, down from 257,000 in November and from 400,000 peak sales in 1990-1991.