Sir David and Sir Fredrick Barclay, the reclusive twins who are one of only two remaining bidders for the Telegraph titles after the Daily Mail and General Trust last night dropped out of the bidding, are believed to be in pole position to win the race.
The Barclays, who own the Scotsman and the Business through their company Press Holdings, are not yet quite through the door of the Telegraph offices in Canary Wharf but they have the keys within their grasp.
Sources close to the pair, who would run the business along with Sir David's son Aidan, said they were "absolutely determined" to win control of the papers. It is not yet clear whether Andrew Neil, the publisher of the Scotsman and the Business, would be given a role at the Telegraph.
The brothers are believed to have submitted a bid that officially tops the £700m-plus figure being touted by investment bank Lazard, which is handling the sale.
But because the Telegraph Group, which comprises the Daily and Sunday Telegraph plus the Spectator magazine, is understood to have around £65m in working capital the true value of the bid is nearer £635m.
The other remaining bid is a joint offer from UK and US equity investors 3i and New York merchant bankers Veronis Suhler Stevenson. They are believed to have bid even more than the Barclays, offering a total of around £715m, giving a true bid price excluding the working capital of around £650m.
However, other insiders close to the bidding process insist that the 3i consortium remains "very confident" about its chances as the auction goes down to the wire.
Both the remaining bidders are left engaged in a high stakes game of bluff.
Neither knows the true size of the other's bid and 3i insists that, despite remaining determined to not exceed its self-imposed limit, their joint bid with Veronis Suhler Stevenson will be big enough to seize the Telegraph titles.
But sources close to the Barclay camp believe that the brothers' determination to land the papers will see them trump any bid from 3i and Veronis Suhler Stevenson.
Despite the narrowing field of bidders, most involved in the process now don't expect a decision from Hollinger International and Lazard until early next week.
However, the Barclays are said to be ready to increase their bid if necessary in order to secure the titles. Because their bid is privately funded they are not subject to the same pressures as DMGT, a public company, or the private equity consortium, which must generate a return for investors.
From an initial field of more than 15 the list of bidders is now down to two following the withdrawal of the joint bid from DMGT and CVC, who said today the asking price had risen beyond their reach.
A senior DMGT executive said the price had gone beyond what they were prepared to pay. "We've said all along that we set a limit and we have stuck to it," he said.
DMGT has spent a considerable sum preparing its bid over the past six months, hiring a team of lawyers, lobbyists and advisers to work on its behalf and will now have to write off the money.
The withdrawal will come as a bitter disappointment to Lord Rothermere, who showed his determination to land the papers by uncharacteristically agreeing to DMGT becoming the junior partner in the bid in an effort to avoid regulatory scrutiny.
Those close to the bidding believe the fact that the 3i consortium remains in the running while a string of other private equity groups including CVC, Candover and Apax have balked at the high price means that they plan to make cost savings if they win the race.
The theory is given further credence by the fact that the 3i bid is being led by former Mirror chief executive David Montgomery, remembered for his savage cost cutting at the paper.
Despite being clear favourite, the Barclays will not be uncorking the champagne just yet, having believed earlier this year they had clinched the titles only to be dramatically blocked by a Delaware judge.
The Barclays tried to buy control of the Telegraph directly from deposed proprietor Conrad Black but a US court thwarted the £260m deal, ruling in favour of the paper's parent company, Hollinger International.
They had approached Lord Black directly last summer and he finally succumbed to their demands to sell in January but his failure to include other shareholders in the deal proved a fatal snag.
The auction was sparked last year when a strategic review of the company uncovered more than $200m in disputed payments to Lord Black and other former senior executives.
The sale was given fresh impetus last month when Lazard confirmed it would concentrate on the sale of the Telegraph Group, with Hollinger International retaining control of the Chicago Sun-Times group.
Lord Black, who denies allegations of impropriety, still controls the company holding 30% of Hollinger's equity and 73% of voting rights and could try to scupper the sale by seeking a court order for a shareholder vote on the Telegraph disposal.
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