Fleet Street veteran David Montgomery is on the brink of a comeback with plans to target struggling newspaper publishers in a takeover spree and strip out costs as he attempts to build a new digital giant, reports the Daily Telegraph. 

Montgomery, 70, is said to be within days of revealing a new listed vehicle set up to make a series of deals, City and industry sources said.

The company will be called National World, and will debut on the stock market via the reverse takeover of an existing private company by a cash shell. National World will aim to capitalise on the decline of print newspaper circulation and advertising, which has depressed valuations for some publishers.

The slump has hit tabloids and local newspapers particularly hard, in part because, unlike broadsheets, they have been unable to charge readers online.  The Telegraph reports that Investors, including major institutions, have backed Montgomery to lead the consolidation that senior industry executives claim is essential for their survival.

The Ulsterman, who began his Fleet Street career as a sub-editor on The Daily Mirror, gained the reputation of being enthusiastic cost-cutter during his time as chief executive of a forerunner to Reach and then of Mecom, a pan-European newspaper publisher he founded.

The Telegraph report said that Montgomery is working alongside Vijay Vaghela, who last year stepped down as chief financial officer of Reach.  Vaghela, 53, worked at the publisher for more than two decades and was viewed as a central figure in its takeover of the Daily Express and Daily Star titles, and of Local World, a regional newspaper group run by Montgomery.

It is said the pair will use their experience of market consolidation, together with intimate knowledge of their former employer, to seek more mergers.