The Office of Fair Trading is carrying out a review of the existing regulations and the deadline for submissions passed last night.

A group of publishers operating under the banner "Local Media Alliance" has submitted a report calling for further consolidation in the industry.

But Chris Bullivant, whose Observer Standard group went into administration last month, has warned that a new round of mergers leading to two regional "supergroups" would just mean more job losses and closures.

In his own submission to the OFT, he says: "The large publishers are advocating an exchange of assets between them to create greater local newspaper monopolies.

"Their zeal for mergers is no secret - indeed it has largely prompted this review and discussion document. But they have hidden their true motives behind a spurious argument that the current rules negates their ability to turn the threat of digital media to their print businesses into an opportunity.

"Newspaper publishers had, and indeed in many ways, still have the ability to be the number one choice for the public on the web. They have just not gone about it very well, as evidenced by the Fish4 failure.

"If merger and consolidation is allowed into two big groups, they will have an even great stranglehold on the marketplace to keep budding publishers out of whatever ilk - and the ability to charge advertisers what they like and dish up whatever quality of journalism to readers they feel is adequate."

The National Union of Journalists has also called for a "small is beautiful" solution to the current crisis facing the industry.

"The union would favour the takeover of individual titles by locally-based companies rather than takeovers of whole groups or titles by existing national groups," it states in its own submission.

"It is our belief that the future of local news journalism will be safest in the hands of local companies with a committment to the communities concerned."

The NUJ also argues that the big groups missed an opportunity by launching web brands such as "fish4," "ic" and "thisis" that were not obviously connected to their newspaper operations.