Dawson News' newspaper distribution arm is close to going into administration, after it emerged that it owes millions of pounds to newspaper groups.
Daily Mail and General Trust (DMGT) is to sever its contract with Dawson, who owes the newspaper group £12m.
Dawson also owes Trinity Mirror £7m, the newspaper is looking for an alternative contract.
Dawson has lost large contracts with newspapers with a total value of £500m to its rivals Smiths News and John Menzies since early spring this year.
The distribution business had recently lost a contract with News International, parent company to The Times, and also with Telegraph Media Group, Seymour, Associated Newspapers, Marketforce and Comag.
Dawson is now organising the transferral of its business to its rivals to ensure that newspaper distribution will not be affected.
It has been reported that Dawson has been in discussion with parties interested in the business and assets of the distribution arm.
