The OFT's initial proposal to open magazine distribution up to competition last year meant that up to 1,000 magazine titles were at risk of closure, posing a substantial threat to UK printers.

The country's major retailers, such as Tesco, Sainsbury's and Asda, were identified as the only potential beneficiaries of last year's proposals, which could have also led to the closure of up to 12,000 newsagents.

Fierce industry opposition had been mounted to the original draft proposal, which recommended treating magazines and newspapers differently, opening up the magazine distribution market to competition while exempting newspapers from the new competition rules.

"Just a few months ago the OFT was on the brink of a decision that could have been seriously damaging to the industry," said Ian Locks, chief executive of the Periodical Publishers' Association.

The decision to return to the drawing board follows an internal review ordered by a new management team at the OFT.

A new draft proposal on the distribution system is expected in May, followed by a consultation and final opinion due in the autumn.

Speculation is also mounting that the Department of Trade and Industry is considering taking control of the whole issue, removing it from the OFT altogether.