According to newspaper industry sources quoted in The Observer on Sunday, IN&M did admit that it may allow rival newspaper groups to combine some of its papers' back office functions, such as IT and accounts, but denies talk of an offload.

The Independent has the lowest circulation of all of the national newspapers, with numbers falling to 220,957 in September – down 4% for the month and 12.1% year-on-year.

It was also forced to raise its cover price to by 25% to £1 in order to stem a drop in advertising revenues, despite a recent colour relaunch and appointment of a new editor.

Both sides have denied the speculation of a sale with some reports citing a nominal price of £1, due to mounting money pressures and low circulation figures. Gavin O'Reilly, IN&M chief operating officer, is said to have described it as "complete fabrication".

Chief executive Tony O'Reilly is under pressure from major shareholder and telecoms tycoon Denis O'Brien – who owns a 26% stake – to offload the titles.

According to The Times, Tony O'Reilly is reluctant to sell off more shares to raise money because this may allow O'Brien to possibly launch a takeover, as he is the second largest stakeholder after the O'Reilly family.

The Observer claimed that selling the two newspaper titles, even for a low price, would be cheaper for the group than closing them down.