Six years ago the British national newspaper market was in the doldrums. Both tabloid and broadsheet sales had declined badly since 1990, the beginning of the recession. Nowhere was this more obvious than at Wapping, Rupert Murdoch's press headquarters, where both the Sun and the Times were steadily losing circulation.

But Mr Murdoch had two advantages over his rivals: he had a daring rescue plan and, most important of all, he had deep enough pockets to fund it. By cutting the cover price of his two dailies he aimed to win sales for his own titles while eroding those of his main competitors. So, in July 1993, he cut the price of the Sun, selling it at less than half the price of its main rival, the Daily Mirror.

The result was dramatic. The Sun's sale took off while the Mirror, after a static period, rapidly declined. With that success under his belt, Mr Murdoch did the same with the Times in September 1993, cutting the price from 45p to 30p. Despite a widely-held belief that broadsheet buyers would not be influenced by price, Mr Murdoch was proved right.

The Times sold 354,000 copies in the month before the cut. Six months later it was heading towards 500,000 while the Daily Telegraph had dipped below a million for the first time in living memory and the Independent, which had previously been neck and neck with the Times, had decreased to 270,000 and was continuing to fall.

From the moment Mr Murdoch launched his price war, it was the Independent which felt most vulnerable. It was desperately short of money and complained to the Office of Fair Trading (OFT) that the Times was guilty of predatory pricing. The complaint was rejected and in March 1994 the Independent's original owners were finally unable to soldier on and it was bought jointly by Mirror Group and Dr Tony O'Reilly's Independent group.

When the Daily Telegraph, its sales having fallen below a million, was forced to reduce its price the Times responded with another cut, to 20p. A second complaint to the OFT about anti-competitive activity also failed.

Over the next two years the Times's circulation went on rising, going well beyond 650,000, while the rivals were becalmed.

Mr Murdoch decided to increase the pressure in June 1996 by cutting the Monday issue of the Times to 10p and holding down the Saturday price well below the cost of production.

Once Labour came to power in May 1997 with a pledge to bring in new competition legislation the groups owning the Independent, the Guardian and the Daily Tele- graph launched a campaign to introduce a specific ban on newspaper owners selling their titles below cost. Mr Tony Blair's government refused to do so.

Instead, ministers encouraged the OFT to make a fourth investigation, with particular attention to the heavily under-priced 10 pence Monday Times. In the runup to the formal announcement of the inquiry, the Times went up to 20p in January 1998.

While the OFT went through its laborious exercise, Mr Murdoch raised it still further in May 1998 to 30p, reducing it for the rest of the week, which had been selling for 35p, to the same price. The Saturday issue went to 60p. Still the OFT dragged its heels. Finally, on May 21st after a 15 month investigation, the OFT's director-general, Mr John Bridgeman, issued a short statement in which he accused the Times's owner of having deliberately made a loss between June 1996 and January 1998 and that this affected competition. But he had decided not to make a formal referral to the Competition Commission in the light of informal assurances from Mr Murdoch's executives that the Times's price won't be cut at present. If the company changes its mind it must provide a detailed explanation within 10 days.

The outcome of the inquiry leaves many questions unanswered and allows Mr Murdoch, and the Telegraph, wide latitude. Most importantly, the OFT did not say whether the Times had been guilty of predatory pricing, the central accusation. Though it said the paper was deliberately losing money, implying that it was wrong to do so, the Times is still losing money at current cover prices.

Mr Bridgeman also treated the complainants rather shabbily. He noted: "Competitors alleged that they have been forced to cut prices or lose sales and that investment has been reduced accordingly." The use of "alleged" casts a slur on the other papers and enabled him to remain silent on the disastrous effects on them.

Furthermore, the OFT did not address the Telegraph's use of subscriptions nor the Times's habit of regional price cutting, especially in Ireland and Scotland. It was, in other words, a fudge.