Trinity, the regional newspaper group whose bid approach sparked the boardroom row, has signalled it is willing to raise its original 165p a share indicative offer. It was last night standing by to resume talks in the event of Mr Montgomery quitting today.
Bankers say that with the boardroom row resolved, Mirror will be in a better position to negotiate with both Trinity and Regional Independent Media group, which had also tabled a bid with the backing of Candover the venture capital group, and Goldman Sachs.
There were suggestions at the weekend that Hearst Corporation, the US newspaper group, might step in with an offer, particularly if the decision was taken to split Mirror up and sell the national titles - the Mirror, Scottish Daily Record and Sunday Mail - separately from regional titles. It is the latter that interest Trinity.
Shareholders are also hoping that Axel Springer, the German publisher that tried to buy the Mirror last year, might return to the fray.
Sir Victor Blank, Mirror Group chairman, was last night believed to have persuaded the executive directors to abstain in the event of a vote for Mr Montgomery's removal being required at a crucial board meeting of the group today.
A last ditch appeal by Mr Montgomery to key Mirror Group shareholders appeared last night to have failed, with bankers insisting that they had not been swayed from their view that there was no way forward for the group with Mr Montgomery at the helm.
The executive directors, some of whom are extremely close to Mr Montgomery, had until late yesterday been expected to line up on his side, accentuating the split that has torn the group apart since the two sides fell out over the approach from Trinity two weeks ago.
Sir Victor is believed to have the full backing of the non-executives, particularly Sir Gordon Borrie, the former director-general of fair trading, and Angus Grossart, who heads Noble Grossart, the Edinburgh merger bank, although Mr Montgomery had hoped to persuade at least one, Sonia Land, to back his campaign to stay.
John Allwood, the former finance director who heads the regional newspapers arm, has already been lined up to replace Mr Montgomery.