Mr Lebedev - who owns stakes in Russian banks, insurers and airline Aeroflot as well as the country's main opposition newspaper - said last week he was interested in influential British newspapers, in crisis as advertising revenues plummet.

A new company, Evening Standard Ltd, will be set up to own the Evening Standard with DMGT retaining a minority stake of 24.9 per cent, DMGT said on Wednesday.

'The investment planned by Lebedev secures the future of the paper,' DMGT chief executive Martin Morgan said. 'DMGT will benefit from the reduction in losses and will continue to invest in the development of our newspapers and other businesses.'

As well as cuts in advertising spending driven by the economic downturn, the Evening Standard - an afternoon and evening tabloid aimed at commuters - has been battered by competition from free newspapers distributed at London stations.

Mr Lebedev, a former KGB agent posted to London in the 1980s, will be chairman of Evening Standard Ltd, and the transaction is expected to close next month.

Lazard & Co advised DMGT, whose shares were down 2.4 per cent at 254.25 pence after the widely expected announcement, slightly underperforming a 1.9 per cent weaker European media index. -- REUTERS