Mirror Group shares rose as Mr Montgomery's removal heightened expectations of an auction for the company, which could result in it being broken up. He has been replaced as chief executive by John Allwood, formerly chief executive of Mirror group's regional titles and Scottish interests.
The secretive and super-rich Barclay twins, David and Frederick, are thought to be interested only in the Mirror, Sunday Mirror and People titles. They would almost certainly be prevented anyway from buying Mirror Group's Scottish titles, the Daily Record and Sunday Mail, because of their ownership of the Scotsman and Scotland on Sunday.
Trinity, the regional newspaper group which broke off renewed merger talks with Mirror Group two weeks ago, said it was watching events as they unfold. A spokesman added that it was now time to "let the dust settle" and allow Mirror Group shareholders to decide what they wanted to do.
Trinity had proposed an all-share merger valuing Mirror Group shares at 165p. This offer was subsequently trumped by a 200p-a-share cash offer from Regional Independent Media, backed by the venture capitalists Candover, valuing Mirror Group at pounds 913m.
The RIM offer was rejected by the Mirror board, although it said it was prepared to enter further discussions with the group, which is chaired by Sir Norman Fowler, the former Conservative Party chairman.
A takeover by either Trinity or RIM, publisher of the Yorkshire Post, could play into the hands of the Barclays since the two regional newspaper groups are thought to be interested primarily in the Mirror Group's regional titles, which include the Birmingham Post.
However, the Barclays could face competition from the German publishing group Axel Springer, whose stable includes the German tabloid daily Bild.
Springer, which is led by the former News International executive Gus Fischer, made an approach worth 240p a share last summer but those talks also broke down.
Another possible bidder is Hearst Corporation, the US magazine company, which has financial backing from the venture capital group Compass Partners. It had made contact with Mr Montgomery but made no formal offer.
Meanwhile Mr Allwood stressed yesterday that he was not in any hurry to sell the company. He said that it was now time for a "period of reflection" while he assessed the strategy of the group. The new chief executive has pledged to report back to shareholders when the Mirror Group reports its full-year results in March.
Mr Allwood stressed yesterday that the group possessed good brands with rising circulations that amounted to a strong business going forward.
After the high drama of the last fortnight, Mr Montgomery's departure was a subdued affair. There was no boardroom vote and it took the Mirror board just 15 minutes to agree compensation terms and accept his resignation.
He will receive a severance package worth more than pounds 1m, including share option entitlements.