Battle of London freesheets ends as 'Lite' looks to fold

The free newspaper battle for London's commuters is to end after just three years, as the London Lite's publisher prepares to close the title, leaving the streets clear for The London Evening Standard.

Associated Newspapers yesterday announced it had "entered a period of consultation over the future of London Lite, its free London evening title, which may result in closure".

The announcement comes less than two months after bitter rival The London Paper announced plans it was to close, and just two weeks after the Evening Standard shed its cover price.

Steve Auckland, managing director of Associated Newspapers' Free Division, said: "The latest development in the London afternoon free newspaper space dictates that we look again at the future of London Lite."

He added that despite the Lite reaching a large audience, "we are concerned about the commercial viability in this highly competitive area".

Executives at Associated Newspapers – which publishes the Daily Mail – were already reviewing the paper's future after The London Paper's closure, but the Standard's decision to go free is understood to have been the major factor in yesterday's announcement. Associated said it would consult with the Lite's 36 employees before a final decision is taken. David Elms, a media partner at KPMG, said: "There is a more limited market for advertising in the evening, and with the Evening Standard's heritage, it was always likely to command more of the revenues."

Question marks had hung over the London Lite since its competitor the London Paper, owned by Rupert Murdoch's News Corporation, announced it was to fold in August. James Murdoch, chairman and chief executive of News Corp in Europe and Asia, said the venture had "fallen short of expectations" as it made a pre-tax loss of £12.9m in the year to June 2008.

News International announced the launch of The London Paper in 2006, but Associated released the Lite as a spoiler just days before its rival. By July The London Paper had a circulation of 500,000, while the Lite had 400,000, but both were still loss making.

The Standard announced it would go free at the beginning of the month. It dropped the 50p cover price and upped the circulation to 600,000. "The question is, will there be a sufficient advertising market to sustain the Standard's new business model," Mr Elms said.