As regional publishers invested heavily online but could not stop declines in circulation and print ad revenue last year, the UK's local newspaper industry lost about 225 million pounds in 2006, the Financial Times reported Thursday.

So far, the newspaper industry views 2006 as a low point, as most regional publishing groups have reported improvements this year and a slowing trend in ad revenue decline, according to a survey by the Newspaper Society of its members published Thursday.

The survey also found the number of Web sites owned by the 85 regional or local newspaper groups in Britain grew by a third to 1,102, while new magazines and other niche publications rose by 21 percent, to 755, the Financial Times reported.

However, the increase in revenue newspapers raked in from other sources were not enough to make up for losses of traditional advertising sales, causing the industry's revenues to fall from about 4.09 billion pounds to 3.87 billion, a five percent drop, between 2005 and 2006.

Analysts agree online income won't come close to saving regional newspaper publishers.

Although the Internet is a “useful tool” for classified advertising, what regional newspapers “have to work out is how to reposition themselves to capture that revenue, and I don't think there is a quick fix,” Richard Hitchcock, analyst for Numis, told the Financial Times. “It is a question of long-term investment and there is a real doubt that they will ever replicate their position offline. I think that is highly unlikely, in fact.”