Black's reign at Telegraph approaches its final hour

Lord Black of Crossharbour is set to be ousted as chairman of the Telegraph Group in the next few days. He faces losing the position at the helm of the UK's biggest-selling broadsheet, a post he has held for nearly two decades, as the row with his New York-listed company, Holl- inger International, escalates.

The Canadian press mogul has refused to repay $850,000 (£460,000) to the group, which he was due to deliver by 31 December. The money is part of $7.2m in non-compete fees received by Lord Black that the company claims were not authorised by the board.

Lord Black's lawyer, John Warden, of the New York firm Sullivan & Cromwell, claimed last week that new evidence has emerged that may prove the payments were genuinely authorised. However, Hollinger International's interim chief executive, Gordon Paris, has refused to back down and has set a deadline of next Sunday for Lord Black to make the repayment.

Sources close to Mr Paris say removing Lord Black from the positions he holds at Hollinger International is "a matter of interest and consideration".

Lord Black quit as chief executive of the group in November when the row about unauthorised payments came to a head. But he remains chairman of the company and chairman of its most profitable subsidiary, Telegraph Group, owner of the Daily and Sunday Telegraphs and The Spectator.

It is understood that Mr Paris is ready to remove Lord Black as chairman of the Telegraph as early as a week on Monday if the payment question is not resolved, and then call a board meeting to have him removed from the chairmanship and the board of Hollinger International.

Lawyers for Lord Black and for Hollinger International will meet this week to try to resolve the matter. However, sources close to Lord Black indicated they were not confident the issue could be settled by Sunday's deadline.

Lord Black's position has been weakened by two former Hollinger International directors, David Radler and Peter Atkinson, who agreed to pay more than $900,000 of their unauthorised payments back to Hollinger International ahead of the deadline. In total more than $15m in unauthorised fees was paid to the trio.

Richard Breeden, the former chairman of the US Securities and Exchange Comm- ission, who led the investigation into $32m of payments made by Hollinger International to Lord Black and others, is understood to be livid that the peer is challenging the need to pay the money back.

Up till now, Hollinger International has been unwilling to take too hard a line with Lord Black. It is believed theboard is concerned he may try to sell the 30 per cent stake he holds in Hollinger International through his Canadian-listed company, Hollinger Inc.

Lord Black agreed not to sell the stake in a deal struck last November, but ousting him from the company could render this null and void. The mogul, though, has troubles at Hollinger Inc, four of whose directors resigned in November after he refused to agree changes to the way the group was run.

Hollinger International has hired Lazard, the merchant bank, to see how it can sort out its finances. It is expected it will recommend that it sells the Telegraph, which made pre-tax profits of £39.6m in 2002, a little over half of its peak profits of £75m in 2000. Media experts believe it could be worth as much as £1bn.