Labour leader wants Mirror boss sacked

JOHN SMITH, leader of the Labour Party, is pressing the banks that control 54 per cent of Mirror Group Newspapers' shares to sack the group's chief executive, David Montgomery, the former editor of Today and the News of the World.

Until now, the Labour leader has stayed above the fray. His unprecedented involvement in the lobbying of leading City institutions underlines the mounting fears in Opposition circles that the Mirror Group is breaking with its traditionally socialist stance.

The move comes after a series of departures from the staff and management of MGN, which have brought into question the commitment of Mr Montgomery and his new team to the Labour Party.

Among those to go have been the Daily Mirror editor, Richard Stott, the columnists Paul Foot and Anne Robinson, and the paper's political editor, Alastair Campbell.

The message from Mr Smith was delivered by Peter Mandelson, MP for Hartlepool and former head of communications for the Labour Party, at a recent meeting with Simon Lewis, the head of external affairs at National Westminster Bank, which has a claim to over a third of MGN's shares.

Mr Mandelson told NatWest, on behalf of the party, that assurances given by the bank that the Daily Mirror would continue to support Labour should remain valid for any potential purchaser of the bank's stake, which may be sold in the next few weeks.

'I strongly expressed the view that selling the shares on while David Montgomery continued to be the chief executive, behaving like an old-fashioned proprietor, leaves no hope at all that the left-of-centre political commitment of the papers will continue,' Mr Mandelson said.

It is understood the banks have said that they cannot give those sort of assurances, but have noted the sentiment.

Mr Mandelson was one of the MPs who signed an early day motion last month expressing no confidence in Mr Montgomery over the departure of Mr Campbell, the political editor.

Lord Hollick, the Labour peer who was then on the board of MGN, was reported to have supported the motion. He resigned from MGN's board last Tuesday, saying that there were governance and policy problems in the group,

In his defence, Mr Montgomery can point to the turnaround in MGN's commercial fortunes that he has achieved since joining the group in November.

The group is tomorrow expected to announce that it made a loss of around pounds 10m last year, though this comes after pounds 40m of redundancy costs, pounds 17m of payments to shore up the pension scheme after the thefts by Robert Maxwell and about pounds 60m of interest payments.

The operating profits of the company rose by nearly 15 per cent to around pounds 95m and are expected to show another strong rise this year, when the pre- tax figure is likely to recover to pounds 60m.

MGN is also expected to show that it has reversed the decline in sales that it had been suffering since Mr Montgomery took over. After Robert Maxwell's death, the combined sales of the Daily Mirror and Scottish Daily Record briefly overtook those of their main rival, News International's Sun, but dropped back after price rises in the summer.

Sales have trailed the Sun all winter, but last week the gap narrowed. According to unaudited figures, the Mirror/Record overtook the Sun on Tuesday, selling 3,402,000 copies compared with the Sun's 3,396,000.

(Photograph omitted)