The committee is said to have been aware of irregularities in purchases for more than a month.

Hollinger International is one of North America's largest newsprint consumers. In 2002, Hollinger spent a total of 82m ($150.4m) on newsprint. Hollinger's main businesses, including the Telegraph, bought 299,900 tonnes during that time, equalling 274 per tonne.

This was at a time when the market average price for newsprint was around 254.50 per tonne.

A spokesman for Hollinger declined to comment on any of the allegations. One market source said it sounded strange that with the buying power of Hollinger, it was paying over the odds for newsprint.

"It buys quite competitively in the UK so I imagine this would be confined to US deals," said the source.