If the deal succeeds, MGN would take a 40 per cent stake in the Independent company, and the MGN chief executive, David Montgomery, would become a director. MGN would also provide a range of technical support, including shared printing and distribution.
Guarantees of editorial independence would be intrinsic to the deal, Mr Whittam Smith told meetings of anxious staff. He said MGN would renounce the right to vote on the board on the appointment and dismissal of the newspapers' editors and that this would be written into the company's articles of association.
However Ian Hay Davison, chairman of Newspaper Publishing, whose board is split over the bid, reacted by pointing out that other parties have expressed a serious interest in the company, and may well put forward alternative bids. These include Tony O'Reilly, the Irish former rugby international who is chief executive of HJ Heinz. He owns newspapers in Ireland and Australia.
Mr Hay Davison is irritated at the time taken by Mr Whittam Smith to prepare his offer, and the effect that is having on staff morale. Yesterday's announcement also failed to put a price on the shares.
Mr Hay Davison said that a six-strong board committee - those directors not involved in Mr Whittam Smith's bid - 'will assess the alternatives available to Newspaper Publishing on their merits, including the proposed offer by the (Whittam Smith) consortium, with a view to securing an outcome which is in the best interest of Newspaper Publishing, the future of its titles, and all of its shareholders and employees'.
The committee questions the idea that the Independent needs a trade investor with printing plants.
A meeting of the National Union of Journalist's chapel (office branch) voted to reject the bid. In a resolution carried with one abstention it added: 'It is well known that the written guarantees given by David Montgomery on his appointment as chief executive of MGN in October 1992 (no editorial job cuts, no removal of editors, continued union recognition) were all broken within a few days. We question whether he is a fit person to be involved with the Independent/Independent on Sunday.'
The consortium led by Mr Whittam Smith also includes two existing European shareholders: Promotora de Informaciones SA, publisher of the Madrid-based El Pais, and Repubblica International Holding SA, which publishes La Repubblica in Rome.
These two hold 37 per cent of the shares in Newspaper Publishing. Two more founder directors, Matthew Symonds, deputy editor of the Independent and Adrian O'Neill, advertising and marketing director, have joined Mr Whittam Smith in the consortium.
Under a legally binding agreement reached by the partners last weekend, they expect to table an offer for the 52.92 per cent of the share capital currently held by institutional investors.
Mr Whittam Smith said they expected the link with MGN would be agreed by the Monopolies and Mergers Commission because of financial necessity.
The proposed shareholding structure would give the continental shareholders control with just over 50 per cent, with the three founding shareholders remaining at 10 per cent. Fresh capital, to expand editorial coverage, would come with loans from the shareholders.
The seven-strong board would consist of two directors each from MGN, El Pais and La Repubblica, together with Mr Whittam Smith, as chairman.
Mr Whittam Smith said that MGN, owned by institutional investors, had the advantage of not being dominated by a tycoon. While nobody was ideal, a link with MGN, which supports the Labour Party, would not affect the Independent's political stance.
He said that the Independent and Independent on Sunday were 'rich in ideas, but desperately short of money. Our innovative powers are superior to any other group, but we have lived a penny-pinching life, closing the gap with hard work.'