The company's board has given the green light for the investment, including new presses for the format which could hit newsstands as early as 2006.

The launch of the Berliner format, halfway between tabloid and broadsheet and used by European newspapers including Le Monde in France, could push GMG to renegotiate its current contract at West Ferry Printers, which runs until 2009.

Bill Wenman, managing director of West Ferry, confirmed that the printer was in discussions with GMG over "how they would produce their future products in Berliner size".

West Ferry currently prints around 60% of The Guardian's print run, with the rest printed at Trafford Park. The newspaper has a circulation of 379,115, according to latest ABC figures.

The switch to the new format, the first UK paper to break away from the broadsheet and tabloid mould, would require investment in at least two new presses. No orders or contracts have yet been signed, but GMG is understood to be looking at a number of suppliers.

A spokesman for GMG said that it was too early to say whether the presses would be installed at West Ferry, Trafford Park, another print works or in-house.

It seems unlikely, however, that Berliner presses would be installed at one of the three print sites of GMG's wholly-owned subsidiary Trader Media Group. TMG declined to comment.

But he confirmed that designers on the paper were working on dummies in the format, but added: "This project is in terms of years rather than months."

Although the move to the Berliner format would be a first in the UK, it follows tabloid launches by The Times and The Independent. Unlike its rivals, however, The Guardian would discard its broadsheet edition altogether.

Story by Josh Brooks