London Lite, the London freesheet, is expected to close next month after Daily Mail and General Trust, its owner, concluded that it could not compete with a newly free Evening Standard.

DMGT said that it would consult the newspapers’ 36 staff, but that the month-long exercise “may result in closure” of the weekday publication, which has a giveaway circulation of 400,000 copies a day.

London Lite had been running up losses of about £10 million a year, but executives at DMGT concluded that the paper had no chance of becoming profitable after the Evening Standard, owned by Alexander Lebedev, went free at the end of September with an increased circulation of 600,000.

Steve Auckland, managing director of Associated Newspapers’ Free Division, said: “Despite reaching a large audience with an excellent editorial format, we are concerned about the commercial viability in this highly competitive area.”

If the Lite closes, it would be the second freesheet to fold within two months. In August, it was announced that thelondonpaper, owned by News Corporation, the parent company of The Times, was to close. The title ceased publication a month later.

The expected second closure would, once again, leave the field clear for the 182-year-old Evening Standard, which has survived a string of newspaper battles in the capital.

Executives at the Standard declined to comment yesterday, but insiders indicated that there was no chance of the Lite merging with the Evening Standard. DMGT owned the Standard until its sale to Mr Lebedev for £1 this year, and still retains a 25 per cent interest in the title, but has no board representation.

• Greg Dyke, former BBC director-general, is in the running to become chairman of Channel 4, competing with Richard Eyre, the former chairman of GCap Media. Neither candidate commented yesterday. A decision is due in the next ten days.

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