Sky News has learnt that Paul Zwillenberg, who stepped down as Daily Mail & General Trust (DMGT) chief last September, has held talks with Sir Paul Marshall, the hedge fund tycoon, about his interest in the newspaper.

Mr Zwillenberg, whose contract with DMGT is said to expire at the end of the month, has not struck a formal agreement to work with Sir Paul or any of the other prospective Telegraph bidders.

However, several people close to the situation said they anticipated that Mr Zwillenberg would in due course align himself with Sir Paul.

One said he was likely to act as a consultant and potentially join the Telegraph owner's board if Sir Paul triumphed in an auction.

Earlier this month, Sky News revealed that the Marshall Wace co-founder had hired Moelis, the investment bank, to advise on a potential offer for the Daily and Sunday Telegraph, and possibly The Spectator magazine.

Sir Paul, who is also a big shareholder in the right-wing television news service GB News, is understood to be serious about his interest in owning the newspapers.

A report earlier this week suggesting that he is in talks with David Montgomery's National World about a joint offer is said by insiders to be wide of the mark.

The three prominent media assets have been put up for sale after Lloyds Banking Group seized control of them from the Barclay family, their long-standing owners.

Sir Paul has an estimated fortune of £800m, according to The Sunday Times Rich List, based on his success during a long career in the hedge fund industry.

He will face competition from a range of other bidders.

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Sky News revealed last month that the Barclay family was trying to line up hundreds of millions of pounds from Middle Eastern investors in a bid to wrest back control of the newspapers from Lloyds.

The family has lodged a series of proposals to buy back roughly £1bn of debt it owes Lloyds Banking Group.

The offers underline its determination not to permanently lose control of the media group it took control of in 2004.

But Lord Rothermere, the Daily Mail proprietor, is talking to Gulf-based investors about backing an offer for the Telegraph titles.

A formal sale process, run by the Wall Street bank Goldman Sachs, will kick off this autumn.

Lloyds had been locked in talks with the Barclays for years about refinancing loans made to them by HBOS prior to that bank's rescue during the 2008 banking crisis.

Until June, the newspapers were chaired by Aidan Barclay - the nephew of Sir Frederick Barclay, the octogenarian who along with late brother Sir David engineered the takeover of the Telegraph 19 years ago.

A sale for £600m, or anywhere close to it, would trigger a substantial writeback for Lloyds, which wrote down the value of its loans to the Barclays several years ago.

Nevertheless, a deal financed entirely by overseas investors could trigger other concerns relating to media ownership, particularly with the traditionally Conservative-supporting Telegraph titles being sold in the year before a general election.

Charlie Nunn, Lloyds' chief executive, said during the summer that he saw no need to run "a rushed sale process".

In July, Telegraph Media Group (TMG) published full-year results showing pre-tax profits had risen by a third to about £39m in 2022.

A successful digital subscription strategy and "continued strong cost management" were cited as reasons for the company's earnings growth.

"Our vision is to reach more paying readers than at any other time in our history, and we are firmly on track to achieve our 1 million subscriptions target in 2023 ahead of our year-end target," said Nick Hugh, TMG chief executive.

The sale will be overseen by a new crop of directors led by Mike McTighe, the boardroom veteran who chairs Openreach and IG Group, the financial trading firm.

Mr McTighe has been appointed chairman of Press Acquisitions and May Corporation, the respective parent companies of TMG and The Spectator (1828), which publish the media titles.

A spokesman for Sir Paul and Mr Zwillenberg both declined to comment.