The join bid between DMGT and private equity company CVC is believed to have been withdrawn after valuations from the two other bidders, venture capitalists 3i and the billionaire Barclay Brothers, pushed the price too high.

It is understood that DMGT and CVC had offered between 600 and 625m for the Hollinger-owned group, which holds titles including The Daily Telegraph, The Sunday Telegraph and The Spectator.

3i and the Barclay Brothers, who own the Scotsman, are understood to have valued the group at between 650m and 700m.

Reports suggest that the DMGT bid had been based on long-term savings that could be achieved through sharing printing capacity, distribution and advertising sales functions.

DMGT said in a statement: "CVC Capital Partners have been leading a consortium, including DMGT, which has been having discussions with Lazard relating to the sale of certain assets of Hollinger International. Those discussions have now terminated.

"DMGT has enjoyed a good business relationship with CVC, even though it was unsuccessful on this occasion."

The sale will trigger the change of ownership clause relating to the Telegraph's 50% share in joint venture West Ferry Printers, which could pave the way for Express Newspapers owner Richard Desmond to take sole ownership of the plant.

Story by Josh Brooks