Tabloids in 'fight to death' price war

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Britain's leading tabloid newspapers are locked in a fresh price-cutting war that will see the two main rivals on sale for 20p tomorrow morning.

The Daily Mirror made the first move, announcing that its weekday cover price of 32p would be reduced by more than a third as part of its £20m relaunch campaign.

The Sun immediately matched the cut and claimed it was now "war" between the two tabloids. In Scotland, the cover price for both titles is expected to fall to 10p.

Piers Morgan, the Daily Mirror's editor, ridiculed The Sun's claims. "We're like the Marines, an elite fighting force which has been looking for an enemy and has failed to find one. The Sun just isn't in it. I don't give a stuff what they do. I don't give a stuff what The Sun, The Star, The Mail or The Express does. What I know is that we've started this one and we intend to finish it."

The tactic is risky and expensive. It will cost the paper £1.2m a week in lost income on its daily sales of 2.1m – more than a million sales fewer than The Sun's.

The circulation battle could also widen. The Star, which sells 755,000, is considering whether to follow suit to protect its recent 10 per cent circulation increases, a move that would spark the biggest Fleet Street price war since 1993 when The Times dropped its weekday price to 20p.

The Sun's editor, David Yelland, was in bullish mood yesterday. In an apparently furious memo emailed to all staff on the paper, he declared war on the Mirror and said his aim was nothing less than to "destroy" them.

"Put very simply, this is a full scale declaration of war on our rivals," the memo read. "Our intention is also very simple: It is to take apart the Daily Mirror's business and destroy it. The same goes for The Star.

"We will keep faith with price until these objectives are met. The investment in this is massive and we owe it to them to respond by producing superb papers. We must sparkle.

"We have an opportunity now to stuff the Mirror and its management totally. The have made two massive, huge, gigantic miscalculations ... First, they have repositioned their paper wrongly – it is a dull product – and they have allowed the ego of their editor to dictate commercial policy. Then they have foolishly taken Rupert Murdoch on in a price war. Who do these two-bit nobodies think they are?"

Mr Yelland added: "This is the most exciting newspaper war for an entire decade and we should all be proud to be a part of it.

"If you have Trinity Mirror shares, by the way, sell them now. They are finished as a company now. Finished!"