KMG pulled out of a proposed deal to purchase the titles from Northcliffe Media after the OFT's decision, citing the costs associated, leading some to claim that both companies will close titles and make redundancies.

However, the Ofcom report, which fed into the OFT decision, stated that while there are risks to competition and consumer welfare from two major local players merging, "there is evidence to suggest that growing constraints from other media may offset these risks".

It continued: "We consider it is important to assess the concerns and benefits of the proposed merger against the likely outcome for consumers absent the merger, not only in the immediate future but over the next few years of structural change.

"The evidence available to us suggests that the target business and the regional newspaper business of KMG will struggle to achieve profitability in their current form, which might lead them to respond by closing newspaper titles or reducing quality.

"In light of this, a merger may provide the opportunity to rationalise costs, maintain quality and investment, and provide a sounder commercial base from which to address long-term structural change, for example by expanding the availability of online and other digital local services.

"These potential benefits need to be weighed against any potential customer harm resulting from reduced competition identified in the OFT's overall assessment."

Publishers claimed that an influx of new media rivals means that any publisher having a monopoly of newspaper titles in one area or city would not be anti-competitive in terms of the wider media landscape. 

In its submission to the report, KMG argued that it would be subject to constraints from a range of choices for both readers and advertisers, including other local print and online publications, specialist websites or publications and local television and radio, even if the merger went ahead.

However, the OFT stated: "The OFT does not consider the evidence sufficiently compelling to justify widening the relevant market beyond the narrow candidate market of local weekly newspapers.

"On the basis of the narrow markets, local weekly newspapers in the six local government areas of East Kent and Medway in which merging parties overlap, this merger would result in a monopoly."

KMG warned the OFT in its submission to the report that closures of titles was "foreseeable" if the merger was not allowed to happen, while Northcliffe used examples of other areas where it had closed or merged newspapers in the last year.

The OFT did note in its report that both businesses have made losses in the last three years, have merged some of their own titles and been through restructuring programmes.

Unsurprisingly, responding advertisers complained that the loss or merger of titles would result in an increase in advertising prices.

The case was the first that the OFT made on newspaper group mergers after claiming in 2009 that it would consider newspaper mergers that gave publishers regional monopolies.