The announcement follows Express Newspapers owner Richard Desmond pulling out of the bidding for the Telegraph titles.

A spokesman for Northern & Shell said: "We were in the bidding process to buy a business not a trophy asset. We look forward to talking to the Telegraph's eventual owner about printing arrangements at West Ferry."

Desmond had said in an interview with the Guardian last month that he would prevent the Telegraph's new owner from using West Ferry after the current contract runs out in 2009 (PrintWeek, 11 March).

US newspaper giant Gannett has also pulled out of the bidding race.

The battle for the Telegraph looks set to be between the Barclay brothers, who have bid around 700m for the titles, and the Daily Mail & General Trust.

Dan Colson, The Telegraph Group's deputy chairman and chief executive left the group last week following the passing of the deadline for the submission of bids for Telegraph parent Hollinger International.

Former Telegraph Group managing director Jeremy Deedes has replaced Colson, including his directorship of West Ferry Printers, until a decision has been made on the ownership of the Telegraph titles.

The Telegraph Group has quashed reports that it is planning an imminent launch of a compact edition of the Daily Telegraph.

A statement said: "We have conducted research and produced dummies, but there is no commitment at this stage to such a format."

The statement was issued in response to reports that a compact edition could be on sale within the next month.

Story by Andy Scott