Tony Blair’s Labour government feared a “bloody fight” with the Daily Mail if its owner successfully bid for the Telegraph in 2004, Cabinet papers reveal.
Sarah Hunter, Blair’s senior policy adviser on Culture, Media and Sport, sent the warning to the Downing Street chief of staff, Jonathan Powell, in April that year.
In the letter, newly released to the National Archives, Ms Hunter said she feared the consequences if the bid for the Telegraph, made by the Mail’s parent company DMGT, was accepted.
Ms Hunter said that the Government needed to dissuade Hollinger International, the then owners of the Telegraph, and Lazards, the investment bank conducting the auction, from favouring the Mail “as soon as possible”.
Ms Hunter wrote that the Mail was “already proposing constitutional remedies” to address the “anticipated public interest concerns” that would arise if it won.
She said: “If the DMGT bid gets accepted and we have to go through a regulatory referral process it will become a bloody fight between the Government and DMGT through the autumn and winter.”
Ms Hunter said the Department of Trade and Industry (DTI) had to give as strong a steer as possible that the Government is minded to block a DMGT sale.
She said that while the best way to communicate with the sellers was through the confidential guidance process, they would also need to “action some more informal communications mechanisms to underline our intent”.
Ms Hunter also suggested that the prime minister should have a conversation with PH, believed to be Patricia Hewitt, the then secretary of state for the DTI.
She said that Ms Hewitt was nervous that DMGT would “fight a personal campaign against her” if she was to give “advice this strong”.
Ms Hunter said that the prime minister would have to “shore her up”.
Ultimately, the Telegraph was sold to the Barclay brothers, Sir David and Sir Frederick, in July 2004 for £665m after a protracted auction.
The Daily Mail stayed in the race until the final week of the auction bidding between £600m and £625m.
The Telegraph is currently up for auction again. Earlier this month, however, a takeover fronted by Dovid Efune, the British-born owner of the New York Sun, failed to meet a deadline to raise financing.
Mr Efune, 39, insisted however that he was still in talks to raise more than £500m from undisclosed investors.
A previous bid by the UAE to take control of the Telegraph was blocked by new laws against state ownership of newspapers.
