Associated Newspapers, one of the UK's biggest newspaper groups, is planning a major price war here in an attempt to boost the circulation of the Daily Irish Mail.

From February 5th, the weekday edition will retail at 30 cent compared with its current price of 50 cent.

The paper was launched 12 months ago at 30 cent before rising to its current price in April. The Saturday paper will be cut in price from 80 cent to 50 cent from February 10th.

Readers on Saturday will also receive a free copy of You, a British women's magazine. You is currently offered free each week with the Mail on Sunday in Britain.

The move will put pressure on Independent News & Media, the Sir Anthony O'Reilly-controlled group whose titles include the Irish Independent and Irish Daily Star.

It could also have an impact on sales of the Irish Sun, the biggest-selling tabloid here.

The Sun's circulation has been in steady decline since the launch of the Daily Irish Mail.

Latest figures from the Audit Bureau of Circulations show that the Mail's Irish edition sold 60,188 copies a day in December.

Based on these figures, the paper, which is believed to have accumulated significant losses to date, will be surrendering about €12,000 a day in circulation revenue.

On an annualised basis, this would equate to more than €3.1 million.

The price cuts, however, should boost sales, which in turn could increase its advertising revenue.

One senior executive at the Daily Irish Mail said the group was "absolutely convinced" that the paper could boost its sales by 10,000 copies a day.