The plan to combine newspaper printing capacity has been on the table for some time, though up until now details had been scarce.

However, according to The Australian, a deal was being discussed whereby Fairfax would have taken on the Melbourne printing for both companies at its newer Tullamarine plant, while News would have handled the Sydney printing at its newer Chullora site. The arrangement would have generated reported annual savings of $60-70 million.

Speaking to ProPrint, Fairfax communications manager Brad Hatch admitted "talks between Fairfax and News Limited have ceased for now", although he wouldn't reveal if they had been suspended or cancelled.

News Limited also confirmed the breakdown of talks but refused to provide any details.

ProPrint understands the complex nature of the negotiations helped contribute to their breakdown.

Issues up for discussion included the length of the deal, the scheduling of printing times and whether the shared facilities would have been a joint venture or controlled by one company.

In a leaked memo last year, Fairfax's Chullora general manager, Paul Peters, told staff that the company would either agree to a joint printing venture with News Ltd or establishing a smaller Fairfax-owned site.

It is unclear whether this week's breakdown in talks means Fairfax will proceed with building a smaller facility.

Hatch said despite the halt in discussions with News, "Fairfax continues to make progress on reducing its cost base by $170 million over the next three years", as outlined in its half-yearly results.

He added the cost-cutting target was not conditional on Fairfax and News striking a printing deal.

Fairfax announced in February that "rationalisation of Chullora" would occur in the "coming year".

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