Meanwhile, Associated Newspapers, parent company of London-specific daily papers the Evening Standard and freesheet Metro, has achieved strong advertising revenues despite an 8% fall in circulation at the Standard.
Britain's quality daily newspapers have recorded a 4% rise in sales over the last year, largely on the back of the pocket-sized Independent's success.
The compact edition increased sales to 262,588, a rise of 21% year-on-year. The improved advertising and circulation revenues have put it on track to break even in the middle of 2006 following recent losses.
The Guardian was less successful, reporting a fall of 4.2%, although its circulation figures are slowly beginning to catch up with those of the Independent's.
Tabloid newspapers fared even worse, losing up to 400,000 readers over the last year.
The UK's largest newspaper group, Trinity Mirror, suffered the most as circulation at its flagship national daily, the Daily Mirror, slumped by 9% to 1.82m, while sales at News International's the Sun slipped by over 5% to 3.36m.
Clare Seager, associate director at media agency Mediacom is worried by the decline in tabloid sales: "it represents a real loss of value for advertisers … in the long term, you'll start having to question the cost efficiency of using the press."
It posted an overall ad revenue rise of 8.5% for the eleven months to the end of August, a performance that looks set to continue into the autumn on advance bookings.
Metro's recent foray into two additional areas of the UK, Bristol and the East Midlands, has paid off with an 8% circulation rise placing it fourth highest of the Monday-Friday newspapers. Its display ad revenue also soared by 25%.
Data sourced from: multiple sources; additional content by WARC staff