Scandal-hit Daily Telegraph in freefall

The Daily Telegraph was rocked to its foundations today after spectacularly losing a £150,000 libel case against George Galloway. This was the latest blow to hit the troubled broadsheet, which last year axed 90 jobs in what was widely regarded as a panic measure, yet has seen its circulation plunge as readers defect to a resurgent Times.

Last year, its former owner, the disgraced foreign press baron, Conrad Black, was declared bankrupt and charged with racketeering and eight counts of fraud. In the last 18 months, the paper has haemorrhaged senior staff, losing its managing director, finance director, commercial director, sales director, marketing director, and editorial director. “All the signs are,” whispered one employee, “that the game is up. I cannot see the paper recovering from this news.”

In June, Dominic Lawson was summarily sacked as editor of its Sunday stablemate in what was seen as a botched coup. Then, just two months ago, the Telegraph’s popular but beleaguered editor, Martin Newland, was forced to quit amid claims of constructive dismissal that have never been denied.

The paper has also had to contend with a series of high-level defections, including that of its City editor, Neil Collins, to the more upmarket Evening Standard. Last night, many in the embattled Telegraph camp were said to be “deeply unhappy” with the paper’s position, with rumours circulating that the paper might face imminent closure if it proves incapable of halting the decline.

“A lot of people I know are feeling pretty bruised by recent events,” explained one anonymous source. “We know our ageing readership is dying off, we can’t attract new readers, and that this is all bad news for our advertising revenues. No wonder profits fell 11% in 2005. Losing to George Galloway is a big dent to morale around here. Frankly I cannot see how we are going to climb out of this hole.”

Speculation was mounting last night that a rival newspaper group would be putting in a takeover bid in the coming days. “The trouble is,” confided one journalist, “that the whole operation lacks confidence. We just do not know what the Telegraph stands for any more. We used to believe that news came first. But now we simply hope that splashing a photo of some gorgeous posh bird on the front page will lure readers. But our readers can see straight through it. They know we’re desperate.”

No-one from the Telegraph was contacted for comment last night.