Run in conjunction with the government's Digital Britain report, which was released today by Lord Carter, the OFT had been asked to report on calls to change the current merger regime in the sector.

It had been argued that local newspapers were in competition with other media and not just each other and should therefore be allowed monopolies of printed news.

However, in a further blow to the ailing industry, the OFT said that the current regime "is well placed to take into account developments such as competition from the internet because it is evidence-based and capable of reflecting market realities".

As such, it recommended no legislative changes, but proposed that it will "formally seek Ofcom's view" in future newspaper merger cases.

John Fingleton, OFT chief executive said: "Competition between publishers is important, not just for providing quality, cost effective content to readers, but also to ensure that the most efficient, customer-focused, dynamic players take advantage of the structural and cyclical challenges that lie ahead."

More to follow…

Also see: New culture secretary voices support for regional papers