MICHAEL SPENCER, the City tycoon, has emerged as a surprise new backer of The Sportsman, the new betting newspaper due to hit the streets later this month, The Times has learnt.

Mr Spencer, a keen backgammon gambler in his youth, has paid less than £1 million for a small equity stake, understood to be less than 10 per cent of the business.

Ronnie Armist, director of Intercapital Private Group (IPGL), Mr Spencer’s private empire, confirmed that a deal had been struck.

“We think it has exciting potential. We like the team very much. We think they’re in an exciting space,” he said.

Mr Spencer, the head of Icap, the listed moneybroker, joins Ben and Zac Goldsmith, Ben Arbib and Max Aitken in backing the newspaper venture. It is chaired by Jeremy Deedes, former chief executive of The Telegraph Group.

They and other backers put up about £11 million to bankroll The Sportsman, a chunky daily tabloid that plans to cover every aspect of gambling, from racing and other sports to poker and financial markets.

The 125 staff, led by the Editor, Charlie Methven, a former Sporting Life journalist, have rights to about 10 per cent of the business.

The venture is inevitably regarded as a big gamble in itself because it challenges the incumbent operator, Racing Post, owned by Trinity Mirror.

Mr Spencer, who owns the financial bookies City Index, has backed a wide range of financial and media businesses through IPGL.

He is an investor in Mecom, David Montgomery’s investment vehicle for European newspapers, and in The Engine Group, which owns the advertising agency WCRS.

Mr Spencer’s name on the shareholder register will give added credibility to the newspaper as it attempts to win support from advertisers and retailers.

The first issue is pencilled in for Budget Day, March 22.

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