NEGOTIATIONS which would result in the Mirror Group buying the Belfast based News Letter are at "a very advanced stage", according to sources.

The News Letter, founded in 1737, is the world's oldest English language daily newspaper and is seen as the voice of the unionist community in Northern Ireland.

The size and structure of the deal is still unclear, although there have been reports that the Mirror Group is to invest £15 million in buying 90 per cent of Century Newspapers, the company which owns the newspaper, and developing an improved colour printing facility.

Century Newspapers is to retain 10 per cent of the company and Century's majority shareholder, Sir Ray Tindle, is to stay as a non executive chairman. The minority shareholders in Century include chief executive Mr John Barrons. There is an undisclosed level of investment by venture capital companies.

One source described as "a wee bit on the high side" suggestions that the price being paid for 90 per cent of Century was £8 million. The newspaper operates from a leased premises and has few fixed assets other than its printing equipment which is in need of upgrading. Its current level of profitability around £359,000 last year would not justify anything like that price.

Improved colour printing capability would, however, allow for the printing of the Mirror's Irish editions, as well as increased use of colour in the News Letter itself.

The Belfast Telegraph, which had been printing the Mirror's Irish editions, has switched allegiance to News International, owners of the Sun, the Times and the Sunday Times.

A one year contract for the printing of the Irish editions of the Mirror titles has been signed with Morton Newspapers, which has a new £3.5 million printing plant in Craigavon.

Century and News Letter chief executive Mr John Barrons has said shareholders will not countenance any transaction which would affect the editorial integrity of the pro unionist newspaper.

The chief executive of the Mirror Group, Mr David Montgomery, is a native of Northern Ireland and a supporter of unionism. He was associated with a private group that tried to buy News Letter six years ago, to influence over the editorial content. The current deal involving MGN, however, is concerned with securing capacity than, with politics.

The News Letter has a circulation of 100,000, but 60 per cent of this is accounted by slimmed down edition dust free in the greater Belfast "Over 35,000 copies are paid for," said News Letter editor, Mr Jeff Martin. These are the editions distributed outside Belfast.

The News Letter has been making modest profits since 1992, same year it moved from Donegall Street offices to a purpose building premises in Crescent, Belfast. Profits for 1994-1995 were £349,000.

Six years ago, the then loss making newspaper was bought by Sir Ray Tindle. Sir Ray is the owner of Tindle Newspapers, which publishes regional newspapers in Britain.

The News Letter recently won the Newspaper Society's award for "sustained circulation" in the LJK regional newspapers category.