Contrary to initial rumours, the project is not part of the sale, which could net up to 1.5bn for Daily Mail and Evening Standard publisher DMGT.

Shelving of the project will be bad news for Swiss press manufacturer Wifag, which was understood to have sealed an agreement to provide presses for the new site in North Lincolnshire.

Peter Williams, DMGT finance director, said it would be "inappropriate" to continue work on the plant, which was due to replace sites in Hull, Grimsby and Lincoln, while NNG was up for sale.

He added that the new owner would have to decide on whether to continue with the project, but declined to comment on who might buy NNG, which publishes 100 local and regional newspapers from its ten print plants.

Williams said that the group was also planning to hold on to its Stoke print plant following the sale. "We'd probably then lease it back to the Sentinel. But the plant is pretty well divided between national and local printing."

The "possible" sale of NNG, which made 102m operating profit on sales of 520m this year, could be complete by February or March, according to Williams.

The decision to sell had not been driven by any notion of poor performance in the group, he added.

"It's a great business and if nobody is willing to pay what we feel it is worth then we will hang on to it. But we think that people will be willing to pay more than we can make out of it, and approach the business in a different way."